DCIT, CHENNAI V. A.R.Foundations P Ltd., CHENNAI

ITA 271/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9277 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 11-02-2016
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , ! ' , # $% & [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ] ./ I.T.A.NO.271/MDS/2016 / ASSESSMENT YEAR : 2012-13 THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE 1(1) CHENNAI VS. M/S A.R FOUNDATIONS P. LTD NO.148, ACRAPOLIS, GROUND FLOOR DR.R.K.SALAI CHENNAI 600 004 [PAN AAFCA 1661 B ] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : SHRI A.B. KOLI, JCIT /RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 18 - 04 - 201 6 / DATE OF PRONOUNCEMENT : 26 - 05 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, CHENNA I, DATED 14.9.2015 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI A.B.KOLI, LD. DEPARTMENTAL REPRESENTATIVE SUB MITTED THAT THE ASSESSEE LET OUT THE PROPERTY AND THE AME NITY CHARGES WERE ITA NO.271/16 :- 2 -: CLAIMED AS INCOME FROM BUSINESS. HOWEVER, THE ASSE SSING OFFICER TREATED THE SAME WAS INCOME FROM HOUSE PROPERTY. T HE CIT(A) BY PLACING RELIANCE ON HIS ORDER IN THE CASE OF ASS ESSEES SISTER CONCERN, M/S AR HOLDINGS & ELECTRONICS P. LTD. FOR THE ASSE SSMENT YEARS 2006- 07 TO 2008-09, FOUND THAT THE AMENITY CHARGES RECEI VED BY THE ASSESSEE HAS TO BE CLASSIFIED AS INCOME FROM BUSINE SS. ACCORDING TO THE LD. DR, IN VIEW OF THE JUDGMENT OF THE APEX COU RT IN SHAMBU INVESTMENTS P. LTD., 263 ITR 143, THE INCOME FROM L ETTING OUT OF THE BUILDING NEEDS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT UNDER THE HEAD INCOME FROM BUSINE SS. THEREFORE, THE CIT(A) OUGHT NOT TO HAVE DELETED THE ADDITION M ADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI S. SRIDHAR, LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE ASSESSEE DEVELOPED AN INDUSTRIA L AND IT PARK. THE ASSESSEE HAS LET OUT THE IT PARK TO THREE PERSONS. THE ASSESSEE HAS ALSO PROVIDED UNINTERRUPTED POWER SUPPLY/COMMUNICA TION NETWORK AND OTHER ACCESSORIES AND AMENITIES WHICH ARE NECES SARY FOR AN IT INDUSTRY. IN RESPECT OF THOSE AMENITIES, THE RESPE CTIVE TENANTS PAID THE CHARGES SEPARATELY OTHER THAN THE RENT OF BUILD ING. THE RENT OF THE BUILDING IS CLASSIFIED AS INCOME FROM HOUSE PROPERT Y. HOWEVER, THE AMENITY CHARGES ARE CLASSIFIED AS INCOME FROM BUSIN ESS. THE CIT(A) BY FOLLOWING HIS ORDER IN THE CASE OF ASSESSEES SISTER CONCERN M/S ITA NO.271/16 :- 3 -: AR HOLDINGS & ELECTRONICS LTD (SUPRA) FOR ASSESSMEN T YEARS 2006-07 TO 2008-09, ALLOWED THE CLAIM OF THE ASSESSEE. WHEN THE APPEAL OF THE REVENUE CAME UP BEFORE THIS TRIBUNAL AGAINST THE SA ME ORDER OF THE CIT(A) FOR ASSESSMENT YEARS 2006-07 TO 2008-09, THI S TRIBUNAL BY AN ORDER DATED 13.11.2015 BY PLACING RELIANCE ON THE J UDGMENT OF THE APEX COURT IN CHENNAI PROPERTIES VS CIT IN CIVIL AP PEAL NO.4494 OF 2004 DATED 9.4.2015 FOUND THAT WHEN THE ASSESSEE P ROVIDED UNINTERRUPTED POWER SUPPLY, MAINTENANCE OF NETWORK AND OTHER ACCESSORIES WHICH ARE ESSENTIAL FOR AN IT INDUSTRY, THE AMENITY CHARGES HAS TO BE CLASSIFIED AS INCOME FROM BUSINESS. AC CORDINGLY, THIS TRIBUNAL CONFIRMED THE IDENTICAL ORDER OF THE CIT( A) IN THE CASE OF ASSESSEES SISTER CONCERN M/S AR HOLDINGS & ELECTRO NICS LTD (SUPRA). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT I S NOT IN DISPUTE THAT THE ASSESSEE DEVELOPED AN IT PARK. APART FROM LET TING OUT OF THE BUILDING, THE ASSESSEE HAS ALSO PROVIDED AMENITIES LIKE UNINTERRUPTED POWER SUPPLY, COMMUNICATION NETWORK AND OTHER ACCES SORIES NECESSARY FOR AN IT INDUSTRY. THE ASSESSEE CONSTA NTLY MAINTAINED THE MACHINERY AND OTHER NETWORK SYSTEM SO AS TO ENABLE THE PERSONS WHO ARE OCCUPYING THE IT PARK TO DO THEIR RESPECTIVE BU SINESS. WHEN AN IDENTICAL ORDER OF THE CIT(A) CAME BEFORE THIS TRIB UNAL FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09 IN I.T.A.NOS.174 1, 1742 & ITA NO.271/16 :- 4 -: 1743/MDS/2013, IN THE CASE OF ASSESSEES SISTER CO NCERN M/S AR HOLDINGS & ELECTRONICS LTD., THIS TRIBUNAL BY AN OR DER DATED 13.11.2015, FOUND THAT THE AMENITY CHARGES HAS TO B E CLASSIFIED AS INCOME FROM BUSINESS AND CONFIRMED THE ORDER OF THE CIT(A). SINCE THE FACTS ARE IDENTICAL AS IN THE CASE OF M/S AR HO LDINGS & ELECTRONICS LTD., THE ASSESSEES SISTER CONCERN, THIS TRIBUNA L IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE JUDGMENT OF THE APEX CO URT IN CHENNAI PROPERTIES (SUPRA), THE AMENITY CHARGES HAS TO BE N ECESSARILY CLASSIFIED AS INCOME FROM BUSINESS. THEREFORE, THIS TRIBUNA L DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AN D ACCORDING THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2016, AT CHENNAI. SD/- SD/- ( ! ' ) (CHANDRA POOJARI) # / ACCOUNTANT MEMBER ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 26 TH MAY, 2016 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF