Https://Hcservices.ecourts.gov.in/Hcservices v. M/S.ticel Bio Parklimited, Chennai] Wherein The Division Bench Of This Court Heldas Follows

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 22.07.2021 CORAM: THE HON'BLE MR.JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.NO.257 OF 2017 The Commissioner of Income Tax,Corporate Circle 3(1),Chennai - 600 034. ... Appellant .Vs. M/s.Ticel Bio Park Limited,No.5, Taramani Road,Taramani, Chennai – 600 113. ... Respondent PRAYER:- Appeal preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Chennai, "B" Bench, dated 25.11.2016 in I.T.A.No.2293/Mds/2015for the Assessment Year 2007-2008. This Appeal filed against the Commissioner of Income Tax(Appeals)-II, Chennai - 600034 in I.T.A.No.101/2014-2015/CIT(A)-II, dated 13/10/2015, PAN.No. for the assessment year2007-2009 against the Deputy Commissioner of Income Tax CompanyCircle-III(2), Chennai - 34 in PAN.No. for theassessment year 2007-2008. For Appellant : Mr.M.Swaminathan, Sr. Standing Counsel Assisted by Mrs.V.Puspha, JSC For Respondent : Mr.R.Venkatnarayanan, For Mr.Subbaraya Aiyar Padmanaban JUDGMENT (Judgment was delivered by M. DURAISWAMY, J.) Challenging the order passed in I.T.A.No.2293/Mds/2015 inrespect of the Assessment Year 2007-2008 on the file of theIncome Tax Appellate Tribunal, Chennai, "B" Bench (for brevity,the Tribunal), the Revenue has filed the above appeal. 2. The assessee has let out premises and received RentalIncome. The income, which was classified as income from houseproperty. is not eligible for deduction under section 80IA ofthe Income Tax Act. Challenging the order passed by theAssessing Officer, the assessee preferred an appeal before theCommissioner of Income Tax (Appeals) and the appellate authorityfound that the income from letting out of the lab premise isto be classified as "income from business", therefore, eligiblefor deduction under section 80IA. Aggrieved over the orderpassed by the Commissioner of Income Tax (Appeals), theRevenue preferred an appeal before the Income Tax AppellateTribunal contending that even if the lab was let out, the rentalincome from lab was to be classified as "income from houseproperty", therefore, not eligible for deduction under section80IAof the Act. The Tribunal dismissed the appeal filed by theRevenue. Challenging the same, the Revenue has filed the aboveappeal. 3. The appellant has raised the following substantialquestion of law in the above appeal:- “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 lessees 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 AppellateTribunal was right in allowing the claim ofdeduction u/s 80IA(4)(iii) when provisions ofsection 80IA(4)(iii) are applicable only for theprofits derived out of development and sale ofbuilt up space to a person operating an maintainingthe said space either the developer himself or to athird party and not applicable for rented property?” 4. When the Tax Case Appeal is taken up for hearing,Mr.M.Swaminathan, learned Senior Standing Counsel assisted byV. Pushpa, learned Junior Standing Counsel appearing for the appellant fairly submitted that the substantial questions of lawthat arise for consideration in the above appeal have alreadybeen decided against the Revenue and in favour of the Assesseein the Judgment dated 25.08.2020 made in T.C.A.No.1035 of 2015[Commissioner of Income Tax, Chennai v. M/s.Ticel Bio ParkLimited, Chennai] wherein the Division Bench of this Court heldas follows:- "4. The appellant filed the present appealand suggested the following substantial questionsof law:- 4. When the Tax Case Appeal is taken up for hearing,Mr.M.Swaminathan, learned Senior Standing Counsel assisted byV. Pushpa, learned Junior Standing Counsel appearing for the appellant fairly submitted that the substantial questions of lawthat arise for consideration in the above appeal have alreadybeen decided against the Revenue and in favour of the Assesseein the Judgment dated 25.08.2020 made in T.C.A.No.1035 of 2015[Commissioner of Income Tax, Chennai v. M/s.Ticel Bio ParkLimited, Chennai] wherein the Division Bench of this Court heldas follows:- "4. The appellant filed the present appealand suggested the following substantial questionsof law:- “1.Whether on the facts and in thecircumstances of the case, the Income TaxAppellate Tribunal was right in holdingthat the lease rent income from providingbuild up lab space or industrial use tovarious lesses would constitute incomefrom business and was eligible fordeduction u/s 80IA? 2.Whether on the facts and in thecircumstances of the case, the Income TaxAppellate was right in allowing the claimof deduction u/s 80IA(4)(iii) whenprovisions of section 80IA(4)(iii) areapplicable only for the profits derivedout of development and sale of built upspace to a person operating anmaintaining the said space either thedeveloper himself or to a third party andnot applicable for rented property?” 5. The learned Standing Counsel for thedepartment has submitted that the lease rentalreceived by the respondent/assessee will notconstitute income from the business and it iseligible for deduction under Section 80IA. Thelearned counsel also contended that the Tribunal,without considering the case on merits, hasdismissed the appeal as under:- “3. After hearing both the sides, we areof the opinion that similar issue wasconsidered by this Tribunal in assessee's owncase for the assessment year 2008-09 in ITANo.2123/Mds/2011, dated 2.4.2013, whereindeduction u/s.80IA(4 )(iii) of the Act wasgranted to the assessee on the income earnedfrom let out of built up lab space by providing https://hcservices.ecourts.gov.in/hcservices/ infrastructure facilities. While deciding thisissue, the Tribunal, following the judgment ofthe Jurisdictional High Court in the case ofCIT v. Elnet Technologies Ltd. in Tax Case(Appeal) No.391 and 392 of 2007 dated15.10.2012, has observed as follows:- "7. We have heard both sides,perused the orders of the AssessingOfficer and CIT(A). After givingthoughtful consideration to the rivalcontentions, in the backdrop of the factsstated hereinabove, we are of the viewthat the precise question involved in theappeal is as to whether the assessee, whohas 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, wefind from the case law cited by theassessee in CIT vs. Elnet TechnologiesLtd.(supra)thattheHon'bleJurisdictional High Court has settled thevery issue in favour of the concernedassessee and against the Revenue in itsarguments. No distinguishing featureshave either been pointed out by theRevenue nor they emanate from the factsof the case. Accordingly, we confirm the findings ofthe CIT(A) under challenge." In view of this, we are inclined to hold that theassessee is entitled for deduction u/s.80IA(4)(iii)of the Act.” He, therefore, contended that the Tribunal has notconsidered the case on merits and prayed for settingaside the order passed by the Tribunal. Accordingly, we confirm the findings ofthe CIT(A) under challenge." In view of this, we are inclined to hold that theassessee is entitled for deduction u/s.80IA(4)(iii)of the Act.” He, therefore, contended that the Tribunal has notconsidered the case on merits and prayed for settingaside the order passed by the Tribunal. 6. On the other hand, the learned counsel forthe respondent/assessee has pointed out that thecase on hand is covered by the Judgment of thisCourt rendered in the case of CIT v. ElnetTechnologies Ltd. in Tax Case (Appeal) No.391 and392 of 2007 dated 15.10.2012 and in the case of CITvs. Chennai Properties and Investments Ltd. Hesubmitted that this Court, following the aforesaid https://hcservices.ecourts.gov.in/hcservices/ two Judgments, has passed a detailed order in thecase of Principal Commissioner of Income Tax-4 v.M/s.Khivraj Motors Pvt. Ltd., in TCA.Nos.314&315 of2017, dated 27.07.2020, and therefore, he prayed fordismissal of the present appeal. 7. We have heard the learned Standing Counselfor the appellant/department as well as the learnedCounsel appearing for the respondent/assessee andperused the materials available on record. 8. The issue involved in the case on hand is nolonger res-integra and it is already covered by theJudgment of this Court rendered in the above saidJudgments as stated by the respondent/assessee.Therefore, we do not see any question of law arisingfor our consideration in the present appeal. Theviews of the authorities below are correct and inaccordance with law and do not call for anyinterference. Accordingly, the appeal is dismissed." 5. Mr.R.Venkatnarayanan, learned counsel appearing for therespondent submitted that in view of the ratio laid down by theDivision Bench of this Court in T.C.A.No.1035 of 2015 [citedsupra], the appeal may be dismissed. 6. Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down in theJudgment dated 25.08.2020 made in T.C.A.No.1035 of 2015 [citedsupra], the questions of law are decided against the Revenue andin favour of the assessee. Accordingly, the Tax Case Appeal isdismissed. No costs. Sd/- Assistant Registrar(CS VI) //True Copy// Sub Assistant Registrar Rj To 1. The Income Tax Appellate Tribunal, Chennai,"B" Bench. Chennai,"B" Bench. 2. The Commissioner of Income Tax(Appeals)-II, No.121, Mahatma Gandhi Road, Chennai - 600034. No.121, Mahatma Gandhi Road, Chennai - 600034. 3. The Deputy Commissioner of Income Tax Company Circle-III(2), Chennai - 600034.4. The Commissioner of Income Tax, Corporate Circle 3(1), Chennai - 600 034.+1cc to Mr.Subbaraya Aiyar Padmanaban, Advocate, S.R.No.35129+1cc to Mr.M.Swaminathan, Advocate, S.R.No.35131T.C.A.NO.257 OF 2017 VSN-II(CO)PBS/18/08/2021