TMI Blog2013 (9) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Interest income: ₹ 7,74,19,358/- 4. Operation Maintenance income: ₹ 9,41,22,297/- 5. Revenue sharing income: ₹ 90,925/- 6. Other income: ₹ 21,29,999/- 2. The Revenue is in appeal against the order of the Commissioner of Income Tax (Appeals) in holding that rent of ₹ 51,86,67,230/- from premises i.e. lease rent income of the industrial park, built-up space meant for I.T. industries, is eligible for deduction under section 80IA(4)(iii). 3. Brief facts are that the assessee is a company promoted by TIDCO and ElCOT (Government of Tamil Nadu Undertakings) and is engaged in the business of developing, operating and maintaining Information Technology Park/Software Technology Park (STP) under the name and style of Tidel Park as per approval of the Government of India, Ministry of Industry, Government of India. The assessee during the assessment year under consideration received the following incomes and claimed that the said inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,89,94,202/- he held that these incomes are not eligible for deduction under section 80IA of the Act. 4. The counsel for the assessee relying on the decision of the Hon'ble Madras High Court in the case of CIT Vs. Elnet Technologies Ltd. in Tax Case (Appeal) No. 392 392 of 2007 dated 15.10.2002 and the decision of the co-ordinate Bench of this Tribunal in the case of ACIT Vs. Tidel Bio Park Ltd. in ITA No. 2123/Mad/2011 dated 2.4.2013 submits that the entire income received from letting out of the premises of the assessee including income received for providing all other facilities have to be considered as business income only. The counsel submits that income from developing, operating and maintaining Software Technology Park (STP) would include rent for the use of modules and also charges for other services provided to the users of STP modules. He submits that STP modules cannot be operated without these ancillary services. Therefore, he submits that entire income arising to the assessee is intimately connected with the development, operation and maintenance of STP and hence the entire income is derived from the business of maintenance and operation of STP inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (Appeals) considering the submissions of the assessee and the various agreements and approvals entered into by the assessee for the purpose of setting up of industrial park held that the said income is to 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. 80IA is available to an assessee for the profits and gains of an undertaking enterprise derived from eligible business. The eligible business in this case is an undertaking which develops, develops operates or maintains operate an industrial park notified by the Central Government in accordance with the scheme framed and notified by the Government during the period 01.04.1997 to 31.3.2006 (now up to 2011). The quantum of deduction is 100% for ten consecutive years in a block of fifteen years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s. 80IA(4)(iii). Further, the decisions relied on by the AO are not directly on the issue and have been rendered under different fact situations in the sense that in those cases, it was letting out of property simplicitor and exploitation of ownership of property. The owners of the properties were not exempted under any provision of the Act, whereas TIOEL Park Ltd. is exempted u/s. B(1)\vide CBOT notification dated 20.12.1999. Hence, the ratio of those decisions are not applicable to the appellant. As per the terms of approval granted by the above notification, notifying the appellant as an industrial park For the purpose of section 80IA 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 leased out. In other words, it is a composite lease rent. Since the appellant has develop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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