Deputy Commissioner of Income tax, Pune V. M/s. Mudhol Land Holding Co.Pvt. Ltd, Pune

ITA 901/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8783 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARI KRISHAN
• Keywords: Business income
• Section: 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO S.901 & 902 /PUN/201 7 / ASSESSMENT YEAR S : 20 1 1 - 12 & 2012 - 13 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 14, PUNE ....... / APPELLANT / V/S. M/S. MUDHOL LAND HOLDING CO. PVT. LTD., 111, MUDHOL HOUSE, KOREGAON PARK, PUNE 411001 PAN : AADCM6515E / RESPONDENT ASSESSEE BY : SHRI HARIKRISHAN REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 05 - 07 - 2019 / DATE OF PRONOUNCEMENT : 08 - 0 7 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH ESE TWO APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS) - 7, PUNE FOR THE ASSESSMENT YEARS 2011 - 12 AND 2012 - 13, RESPECTIVELY. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATE I.E. 07 - 12 - 2016. 2 ITA NO S.901 & 902/PUN/2017, A.YS. 2011 - 12 & 2012 - 13 SINCE, THE ISSUE RAISED AND THE FACTS IN BOTH THE APPEALS ARE IDENTICAL, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DISPOSED OF VIDE THIS COMMON ORDER. 2. SHRI HARIKRISHAN APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ASSESSEE HAS DEVELOPED SOFTWARE TECHNOLOGY PARK AND NAMED THE BUILDING , CYBERNEX. THE SOLITARY ISSUE RAISED BY THE DEPARTMENT IN APPEAL IS; WHETHER THE INCOME FROM LETTING OUT OF STP IS TO BE ASSESSED UNDER THE HEAD BUSINESS INCOME OR INCOME FROM HOUSE PROPERTY ? THE ASSESSEE IN ITS RETURN OF INCOME HAS OFFERED THE INCOME FROM LEASING OUT OF CYBERNEX AS BUSINESS INCOME. THE ASSESSING OFFICER HELD THAT THE INCOME FROM LETTING OUT OF STP BUILDING HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN FIRST APPELLATE PROCEEDINGS, THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF DCIT VS. MAGARPATTA TOWNSHIP DEVELOPM ENT & CONSTRUCTION CO. IN ITA NO. 822/PUN/2011 DECIDED ON 18 - 09 - 2012 HELD INCOME FROM LETTING OUT OF STP BUILDING AS BUSINESS INCOME. THE LD. AR POINTED THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 IN ITA NO. 987/PUN/2013 DECIDED ON 28 - 08 - 2014 , THE TRIBUNAL HAS HELD INCOME FROM LEASING OUT OF STP BUILDING AS BUSINESS INCOME. 2.1 THE LD. AR FURTHER PLACED RELIANCE ON THE CBDT CIRCULAR NO. 16/2017 DATED 25 - 04 - 2017 TO CONTEND THAT THE DEPARTMENT HAS ACCEPTED THE LAW LAID DOWN BY HONBLE HIGH COUR T THAT THE INCOME FROM LETTING OUT OF 3 ITA NO S.901 & 902/PUN/2017, A.YS. 2011 - 12 & 2012 - 13 PREMISES IN AN INDUSTRIAL PARK/SEZ IS TO BE ASSESSED UNDER THE HEAD PROFITS AND GAINS OF THE BUSINESS. 3. ON THE OTHER HAND SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ASSESSMENT ORDER. HOWEVER, THE LD. DR FAIRLY ADMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR HAS CONSIDERED THIS ISSUE. 4. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE SOLITARY ISSUE IN THE APPEAL S BY THE DEPARTMENT IS W ITH REGARD TO TAXABILITY OF LEASE INCOME EARNED BY THE ASSESSEE FROM LETTING OUT OF SOFTWARE TECHNOLOGY PARK , CYBERNEX . THE ASSESSEE HAS OFFERED LEASE INCOME FROM BUILDING UNDER THE HEAD INCOME FROM BUSINESS , WHEREAS , THE ASSESSING OFFICER HAS HELD TH E SAME TO BE ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE CBDT VIDE CIRCULAR NO. 16/2017 (SUPRA) HAS ACCEPTED THE DECISIONS RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. VELANKANI INFORMATION SYS TEMS PVT. LTD. REPORTED AS 2 ITR - OL 138 AND IN THE CASE OF COMMISSIONER OF INCOME TAX VS. INFORMATION TECHNOLOGY PARK LTD. REPORTED AS 369 ITR 460 THAT THE RENT INCOME RECEIVED BY THE ASSESSEE FROM LETTING OUT BUILDINGS ALONG WITH OTHER AMENITIES IN A SOFT WARE TECHNOLOGY PARK WOULD BE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM BUSINESS. 5. THE CO - ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008 - 09 IN ITA NO. 987/PUN/2013 (SUPRA) HAS TAKEN A SIMILAR VIEW. SINCE, NO MATERIAL HAS BEEN PLACED ON RECORD BY THE 4 ITA NO S.901 & 902/PUN/2017, A.YS. 2011 - 12 & 2012 - 13 DEPARTMENT INDICATING ANY CHANGE IN CIRCUMSTANCES AND THE WELL SETTLED LAW, WE DO NOT FIND ANY INFIRMITY IN THE ORDER S OF COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, THE SAME ARE UPHELD AND BOTH THE APPEALS OF REVEN UE ARE DISMISSED BEING DEVOID OF ANY MERIT. 6. IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 08 TH DAY OF JU LY, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 08 TH JU LY, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 7 , PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 6 , PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE