Commissioner Of Income Tax,Corporate Circle 3(1),Chennai 600 034 v. M/S.ticel Bio Park Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 25.08.2020 CORAM THE HONOURABLE DR.JUSTICE VINEET KOTHARI &THE HONOURABLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.1035 of 2015 Commissioner of Income Tax,Corporate Circle 3(1),Chennai 600 034...Appellant/Appellant Versus M/s.Ticel Bio Park Limited,No.5, Taramani Road,Taramani, Chennai – 600 113...Respondent/RespondentPAN: AABCT 5758 L Prayer: Tax Case Appeal filed under Section 260A of theIncome Tax Act, 1961 against the order of the Income TaxAppellate Tribunal Madras, 'B' Bench, Chennai, dated 15.05.2015in ITA No.257/Mds/2015. For Appellant: Mr.M.Swaminathan, Standing Counsel assisted by for Mrs.V.Puspha, Standing Counsel For Respondent : Mr.R.Venkatnarayanan, for Subbaraya Aiyar Padmanaban JUDGMENT (Judgment of the Court was delivered by KRISHNAN RAMASAMY, J.) The Court was held by Video Conference, as per theResolution of the Full Court dated 3 July 2020, by Judges attheir respective residences and the counsel, staff of the Courtappearing from their respective residences. 2. This tax case appeal has been filed under Section 260A ofthe Income Tax Act, 1961 against the order of the Income TaxAppellate Tribunal, Madras “B” Bench, dated 15.05.2015 inI.T.A.No.257/Mds/ 2015. https://hcservices.ecourts.gov.in/hcservices/ 3.Mr.M.Swaminathan, learned Standing Counsel appeared forthe department/appellant and Mr.R.Venkatnarayanan, learnedcounsel appeared for the respondent/assessee. 4. The appellant filed the present appeal and suggested thefollowing substantial questions of law:-“1.Whether on the facts and in thecircumstances of the case, the Income Tax AppellateTribunal was right in holding that the lease rentincome from providing build up lab space orindustrial use to various lesses would constituteincome from business and was eligible for deductionu/s 80IA? 2.Whether on the facts and in thecircumstances of the case, the Income Tax Appellatewas right in allowing the claim of deduction u/s80IA(4)(iii) when provisions of section 80IA(4)(iii)are applicable only for the profits derived out ofdevelopment and sale of built up space to a personoperating an maintaining the said space either thedeveloper himself or to a third party and notapplicable for rented property?” 5.The learned Standing Counsel for the department hassubmitted that the lease rental received by therespondent/assessee will not constitute income from the businessand it is eligible for deduction under Section 80IA. The learnedcounsel also contended that the Tribunal, without consideringthe case on merits, has dismissed the appeal as under:-“3. After hearing both the sides, we are of theopinion that similar issue was considered by thisTribunal in assessee's own case for the assessment year2008-09 in ITA No.2123/Mds/2011, dated 2.4.2013, whereindeduction u/s.80IA(4 )(iii) of the Act was granted tothe assessee on the income earned from let out of builtup lab space by providing infrastructure facilities.While deciding this issue, the Tribunal, following thejudgment of the Jurisdictional High Court in the case ofCIT v. Elnet Technologies Ltd. in Tax Case (Appeal)No.391 and 392 of 2007 dated 15.10.2012, has observed asfollows:- "7. We have heard both sides, perusedthe orders of the Assessing Officer and CIT(A). After giving thoughtful considerationto the rival contentions, in the backdrop ofthe facts stated hereinabove, we are of theview that the precise question involved inthe appeal is as to whether the assessee, "7. We have heard both sides, perusedthe orders of the Assessing Officer and CIT(A). After giving thoughtful considerationto the rival contentions, in the backdrop ofthe facts stated hereinabove, we are of theview that the precise question involved inthe appeal is as to whether the assessee, who has raised rental income etc. byproviding infrastructure facilities in anindustrial part is entitled for deductionunder section 80lA (4)(iii) or not.Proceeding to decide this question, we findfrom the case law cited by the assessee inCIT vs. Elnet Technologies Ltd. (supra) thatthe Hon'ble Jurisdictional High Court hassettled the very issue in favour of theconcerned assessee and against the Revenuein its arguments. No distinguishing featureshave either been pointed out by the Revenuenor they emanate from the facts of the case.Accordingly, we confirm the findings of theCIT(A) under challenge." In view of this, we are inclined to hold that theassessee is entitled for deduction u/s.80IA(4 )(iii) ofthe Act.” He, therefore, contended that the Tribunal has not consideredthe case on merits and prayed for setting aside the order passedby the Tribunal. 6. On the other hand, the learned counsel for therespondent/assessee has pointed out that the case on hand iscovered by the Judgment of this Court rendered in the case ofCIT v. Elnet Technologies Ltd. in Tax Case (Appeal) No.391 and392 of 2007 dated 15.10.2012 and in the case of CIT vs. ChennaiProperties and Investments Ltd. He submitted that this Court,following the aforesaid two Judgments, has passed a detailedorder in the case of Principal Commissioner of Income Tax-4 v.M/s.Khivraj Motors Pvt. Ltd., in TCA.Nos.314&315 of 2017, dated27.07.2020, and therefore, he prayed for dismissal of thepresent appeal. 7. We have heard the learned Standing Counsel for theappellant/department as well as the learned Counsel appearingfor the respondent/assessee and perused the materials availableon record. 8. The issue involved in the case on hand is no longer res-integra and it is already covered by the Judgment of this Courtrendered in the above said Judgments as stated by therespondent/assessee. Therefore, we do not see any question oflaw arising for our consideration in the present appeal. Theviews of the authorities below are correct and in accordancewith law and do not call for any interference. Accordingly, theappeal is dismissed. 9.In the result, this Tax Case Appeal No.1035 of 2015 isdismissed. No costs. Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To: 1. The Income Tax Appellate Tribunal Madras, 'B' Bench, Chennai. 2. The Commissioner Of Income Tax(Appeals), Chennai. 3. The Assistant Commissioner of Income Tax, Company Circle-III(2) Chennai-34. +1cc to M/s.Subbaraya Aiyar, Padmanabhan & Ramamani, Advocate in SR.NO..27922 TCA.No.1035 of 2015 SSD(CO) RV(05/11/2020)