ACIT, CHENNAI V. Ticel Bio Park Limited, CHENNAI

ITA 2293/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7982 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . ! , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO. 2293/MDS/2015 $ %$ /ASSESSMENT YEAR : 2007-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3(1), NEW BLOCK, 4 TH FLOOR, 121, MAHATMA GANDHI ROAD, NUNGAMBAKKAM, CHENNAI 600 034. V. M/S.TICEL BIO PARK LIMITED, NO.5, TARAMANI ROAD, TARAMANI, CHENNAI 600 113. PAN : AABCT 5758 L ( &' /APPELLANT) ( ()&' /RESPONDENT) &' * + /APPELLANT BY : SHRI SUPRIYO PAL, JCIT ()&'*+ /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOC ATE , *-' /DATE OF HEARING : 04.10.2016 . % *-' /DATE OF PRONOUNCEMENT : 25.11.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST TH E ORDER OF CIT(A)-11, CHENNAI DATED 13.10.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2 I.T.A. NO.2293/MDS/2015 2. SHRI SUPRIYO PAL, THE LEARNED DEPARTMENT REPRESE NTATIVE SUBMITTED THAT THE ASSESSEE LET OUT THE PREMISE AND RECEIVED THE R ENTAL INCOME. THE RENTAL INCOME HAS TO BE CLASSIFIED AS INCOME FROM HOUSE P ROPERTY. REFERRING TO SECTION 80IA OF THE ACT, THE DEPARTMENT REPRESENTAT IVE SUBMITTED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA ONLY IN RESPECT OF THE PROFIT DERIVED FROM DEVELOPMENT OF INFRASTRUCTURE F ACILITIES. IN THIS CASE, THE ASSESSEE HAS LET OUT THE PREMISE AND RECEIVED RENTA L INCOME. THEREFORE, THE INCOME WHICH WAS CLASSIFIED AS INCOME FROM HOUSE PR OPERTY IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. HOWEVER, O N APPEAL BY THE ASSESSEE, THE CIT(A) FOUND THAT THE INCOME FROM LETTING OUT O F THE LAB PREMISE IS TO BE CLASSIFIED AS INCOME FROM BUSINESS, THEREFORE, EL IGIBLE FOR DEDUCTION UNDER SECTION 80IA. ACCORDING TO THE LEARNED REPRESENTATI VE, EVEN IF THE LAB WAS LET OUT, THE RENTAL INCOME FROM LAB WAS TO BE CLASSIFIE D AS INCOME FROM HOUSE PROPERTY, THEREFORE, NOT ELIGIBLE FOR DEDUCTION UN DER SECTION 80IA OF THE ACT. 3. ON THE CONTRARY, SHRI SAROJ KUMAR PARIDA, THE L EARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE ESTABLISHED A BIO PARK FOR RESEARCH AND DEVELOPMENT. THE LABORATORY FACILITIES AVAILABLE IN THE BIO PARK WERE LET OUT TO VARIOUS BIOTECH INDUSTRIES IN THE STATE OF TAMIL NA DU FOR RESEARCH AND DEVELOPMENT. THE OBJECT AND BUSINESS OF THE ASSESSE E IS ONLY TO DEVELOP THE LABORATORY FACILITIES AND LET OUT THE SAME TO VARIO US BIOTECH INDUSTRIES IN THE STATE. THEREFORE, THE RENTAL INCOME FROM LETTING OU T OF LABORATORY OF BIOTECH INDUSTRIES HAS TO BE NECESSARILY CLASSIFIED AS INC OME FROM BUSINESS. HENCE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IA OF THE ACT. 3 I.T.A. NO.2293/MDS/2015 4. REFERRING TO THE ORDER OF THE TRIBUNAL IN ITA NO .2123/MDS/2011, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON IDENTICAL SITUATION, THIS TRIBUNAL BY PLACING ITS RELIANCE ON THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. ELNET TECHNOLOGIES LTD. IN TAX CASE (APPEAL) NO.391 AND 392 OF 2007 DATED 15.10.2012 CONFIRMED THE ORDER OF THE SIMILAR CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSES SEE WAS PROMOTED BY TIDCO, TIDEL PARK LTD., INDIAN BANK, INDIAN OVERSEA S BANK AND KARUR VYSYA BANK JOINTLY. THE STATE GOVERNMENT DECLARED THE ASS ESSEE COMPANY AS RESEARCH AND DEVELOPMENT INSTITUTION. FROM THE MATERIAL AVAI LABLE ON RECORD, THE STATE GOVERNMENT HAS ALSO PROVIDED CONCESSIONAL POWER TAR IFF TO THE ASSESSEE. THE ASSESSEE IN FACT, DEVELOPED LABORATORY FACILITIES A ND OFFERED THE SAME TO VARIOUS BIOTECH INDUSTRIES FOR RESEARCH AND DEVELOPMENT. IT IS NOT IN DISPUTE THAT THE BUSINESS OF THE ASSESSEE COMPANY IS TO DEVELOP LABO RATORY FACILITIES AND LET OUT THE SAME TO THE VARIOUS BIOTECH INDUSTRIES IN THE S TATE. WHEN THE ASSESSEE DEVELOP LABORATORY FACILITIES AND LET OUT THE SAME TO VARIOUS BIOTECH INDUSTRIES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SUC H ACTIVITY OF LETTING OUT THE VARIOUS BIOTECH INDUSTRIES HAS TO BE NECESSARILY CO NSIDERED AS BUSINESS ACTIVITY. HENCE, THE RENTAL INCOME RECEIVED THERE FROM HAS TO BE CONSIDERED AS INCOME FROM BUSINESS. HENCE, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. IN FACT, FOR THE ASSESSMENT YEAR 2008-0 9, THIS TRIBUNAL IN ASSESSEES OWN CASE FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DE DUCTION UNDER SECTION 80IA 4 I.T.A. NO.2293/MDS/2015 OF THE ACT. THEREFORE, THIS TRIBUNAL DO NOT FIND AN Y REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE S AME IS CONFIRMED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON 25 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANES AN) ' /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, / /DATED, THE 25 TH NOVEMBER, 2016. SP. * (-01 21%- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 3- ( )/CIT(A) 4. , 3- /CIT, 5. 14 (- /DR 6. 5$ 6 /GF.