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M/s. Tidel Park Ltd Versus Assistant Commissioner of Income Tax, Company Circle- III (2) , Chennai and Vica-Versa

Eligibility for deduction under section 80IA - whether lease rent income received from letting out modules of software technology park to various lessees would constitute income from business and eligible for deduction under section 80IA? - Held that:- The issues in both the appeals of the assessee and Revenue have been decided by the Tribunal in assessee’s own case for the assessment year 2008-09 holding that lease rent income from modules built up space of industrial park is assessable under t .....

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e.

As far as the contention of the assessee that interest on debtors should be considered as income from business in view of the decision of jurisdictional High Court in Madras Motors Ltd.(2002 (3) TMI 10 - MADRAS High Court), we find that the decision is distinguishable on facts. In that decision, it was the case of the assessee where the assessee, an export oriented company, is manufacturing forgings derived interest on delayed payment of sale proceeds. In the case of the assessee i .....

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Both these appeals are filed by the assessee and Revenue respectively against the order of the Commissioner of Income Tax (Appeals)-III, Chennai dated 20.10.2014 for the assessment year 2010-11. 2. The only issue in the appeal of the Revenue is that Commissioner of Income Tax (Appeals) erred in holding that lease rent income received from letting out modules of software technology park to various lessees would constitute income from business and eligible for deduction under section 80IA of the A .....

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nd treating it under the head other sources as against the claim of the assessee as income from business . 5. Counsel for the assessee submits that this issue is also covered by the co-ordinate Bench decision in assessee s own case wherein the Tribunal decided the issue against the assessee holding that interest and other income should be assessed under the head income from other sources and not eligible for deduction under section 80IA of the Act. Counsel for the assessee submits that out of in .....

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2008-09. On going through the order of the co-ordinate Bench, we find that the issues in both the appeals of the assessee and Revenue have been decided by the Tribunal in assessee s own case for the assessment year 2008-09 holding that lease rent income from modules built up space of industrial park is assessable under the head income from business and interest income and other income is to be assessed under the head income from other sources . While holding so, the Tribunal observed as under:- .....

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be assessed as profits and gains from business or profession eligible for deduction under section 80IA of the Act. While holding so, the Commissioner of Income Tax (Appeals) held as under:- 6.10. I have carefully considered the facts of the case and the submissions of the Id. AR. I have also perused the approval and the notification issued by the Ministry of Industry and CBDT. I have also gone through the decisions relied on by the /\O and AR. Deduction u/s 80lA is available to an assessee for t .....

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industrial park is developed. In case where an undertaking develops an industrial park and transfer the operation and maintenance of such industrial park to another undertaking (transferee undertaking), the deduction is available to such transferee undertaking for the remaining period in the ten consecutive years. The appellant has been granted the approval of the Government of India, Ministry of Industry, Department of Industrial Policy & Promotion to set up an industrial park in terms of .....

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the appellant company was from providing modules consisting of built up space with common infrastructure facilities like 110/33 KV dedicated sub-station for power, centralized air conditioning system of 6000 TR capacity, telecommunication installations, 100% DG set back-up, 10.5 MVA capacity etc. in the industrial park and other ancillary services to the users. Thus, the appellant has carried out real, substantial, systematic and organized activity. Since the word business is one of wide import .....

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articles or things which can be sold in the market and profit can be earned there from. The core business of the appellant is to let out allocable built-up space along with infrastructural facilities and develop, develop & operate or maintain & operate an industrial park. Therefore, the income earned from such eligible business in the form of lease rent is eligible for deduction u/s 80IA( 4 )(iii). Further, the decisions relied on by the AO are not directly on the issue and have been re .....

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l park For the purpose of section 80lA of the Act, it is clear that the appellant can provide built-up space for industrial use which means the appellant can lease the built-up space for industrial use which means the appellant can lease the built-up space in the industrial park developed, maintained and operated by it. Further, it is noticed that the lease rent collected from the lessees is for land, building and plant & machinery and other built in infrastructural facilities in the modules .....

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siness eligible for deduction u/s 801A of the Act. Accordingly, I direct the Assessing Officer to assess the lease rent income of the industrial park under the head profits and gains of business or profession and allow deduction u/s 80lA for such profits. 10. We also find that an identical issue came up before the Hon ble jurisidictional High Court in the case of CIT Vs. Elnet Technologies Ltd. in Tax Case Appeal Nos.391 & 392 of 2007, wherein the High Court following its earlier order in TC .....

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he head income from business and such income is eligible for deduction under section 80IA of the Act. 11. Further, the co-ordinate Bench of this Tribunal in the case of ACIT Vs. Ticel Bio Park Ltd. (supra) affirming the order of the Commissioner of Income Tax (Appeals) held that rental income, operation and maintenance income, a/c. charges, electricity charges are eligible for deduction under section 80IA(4) of the Act. 12. Following the decision of the Hon ble Madras High Court in the case of E .....

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