DCIT, CHENNAI V. AR Holdings and Electronic Pvt Ltd., CHENNAI

ITA 861/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8871 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHADEVAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Business income
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.861/MDS/2016 ( / ASSESSMENT YEAR: 2009-10) THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI-34. VS M/S. AR HOLDINGS & ELECTRONIC PVT. LTD., 148, ACROPOLIS G FLOOR, R.K.ROAD, MYLAPORE, CHENNAI-600 004. PAN: AAECA5650K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. SAHADEVAN, JCIT /RESPONDENT BY : MR.S.SRIDHAR, ADVOCATE /DATE OF HEARING : 6 TH JUNE, 2016 /DATE OF PRONOUNCEMENT : 9 TH AUGUST, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 1, CHENNAI DATED 05.10.2015 IN ITA NO.84/CIT(A)-1/2 014-15 PASSED UNDER SECTION 143(3) R.W.S. 147 & 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED THE SEVERAL GROUNDS, HOW EVER THE CRUX OF THE ISSUE IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DIRECTING THE LEARNED ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SECTION 80IB(10) OF THE ACT. 2 ITA NO.861/MDS/2016 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF REAL ESTATE FIL ED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 10.09.2009 ADMITTING INCOME OF RS.59,48,317/-. IT W AS NOTICED BY THE LEARNED ASSESSING OFFICER THAT THE A SSESSEE HAD LET OUT ITS LAND & BUILDING IN PLOT NO.45 TO 47 AND 50 TO 52 AT PERUNGUDI, CHENNAI COMPRISING 1.922 ACRES TOGETH ER WITH BUILDING MEASURING BUILT UP AREA OF 57,000 SQ.FT., VIDE LEASE DEED DATED 14.03.2005 TO THREE PERSONS NAMELY SHRI HARINDER SINGH, SHRI HARBINDER SINGH AND GURBINDER SINGH. THE ASSESSEE HAD DISCLOSED RS. 86,52,600/- AS ITS RENTAL RECEIPTS UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND REMAINING PORTION OF RS.80,64,360/- AS AMENITY CHA RGES. SINCE THE CLAIM OF EXPENDITURE AGAINST THE INCOME D ECLARED BY THE ASSESSEE IS UNTENABLE, THE CASE WAS REOPENED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 147 OF THE ACT AND THEREAFTER THE ASSESSMENT WAS COMPLETED UNDER SECTI ON 143(3) R.W.S. 147 OF THE ACT ON 20.03.2014 WHEREIN HE TREATED THE AMENITIES CHARGES OF RS.80,64,360/- AS INCOME FROM 3 ITA NO.861/MDS/2016 HOUSE PROPERTY AS AGAINST BUSINESS RECEIPTS CLAIMED BY THE ASSESSEE. 4. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) FOLLOWING THE DECISION OF THE LEARNED COM MISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEARS 20 06-07 TO 2008-09 ALLOWED THE CLAIM OF THE ASSESSEE, AGAIN ST WHICH THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESEN TATIVE SUBMITTED THAT THE SAME ISSUE WAS DECIDED BY THE CH ENNAI BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR TH E EARLIER ASSESSMENT YEARS 2006-07 TO 2008-09 VIDE ORDER DATE D 13.11.2015. THE LEARNED DEPARTMENTAL REPRESENTATIVE , ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDER OF THE LEARNED ASSESSING OFFICER HOWEVER HE COULD NOT CONTROVERT T O THE SUBMISSION OF THE LD.A.R. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CHEN NAI BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FO R THE ASSESSMENT YEARS 2006-07 TO 2008-09 IN ITA NO.1741, 1742 4 ITA NO.861/MDS/2016 & 1743/MDS/2013 DATED 13-11-2015 HAS DECIDED THE ID ENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UND ER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. NORMALLY WHEN THE BUILDING WAS LET OUT, THE RENTAL INCOME HA S TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. IN THIS CASE, THE ASSESSEE CLAIMS THAT THE BUILDING WAS LET OUT FOR RUNNING DEVELOPMENT OF SOFTWARE IN THE NATURE OF IT PARK. THE ASSESSEE HAS PROVIDED UNINTERRUPTED POWER SUPPLY, NETWORKING AND OTHER FACILITIES WHICH ARE ESSENTIAL FOR IT PARKS. THEREFORE, THE CIT(A) FOUND THAT THE ASSESSEE IS P ROVIDING A SYSTEMATIC SERVICE, HENCE, IT HAS TO BE CONSIDERED AS BUSINESS. WHEN THE ASSESSEE PROVIDED UNINTERRUPTE D POWER SUPPLY, MAINTENANCE OF NETWORK SYSTEM AND OTHER ACC ESSORIES AND AMENITIES ESSENTIAL FOR AN IT INDUSTRY, NATURAL LY, THE AMENITY CHARGES IS FOR BUSINESS, THEREFORE, THE CIT (A) HAS RIGHTLY FOUND THAT IT HAS TO BE CLASSIFIED AS BUSIN ESS INCOME. THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE W ITH THE ORDER OF THE CIT(A). ACCORDINGLY, THE SAME IS CONFIRMED. 7. IN VIEW OF THE ABOVE MENTIONED DECISION OF THE T RIBUNAL, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ON THI S ISSUE BECAUSE HE HAS ONLY FOLLOWED THE DECISION OF THE TR IBUNAL. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 9 TH AUGUST, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER 5 ITA NO.861/MDS/2016 # /CHENNAI, ( /DATED 9 TH AUGUST, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .