Ita/318/2013 Of The Commissioner Of Income-Tax v. M/S Information Technology Park Ltd

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 3Q DAY OF APRIL 2014 PRESENT. THE HON'BLE MR.JUSTICE DILIP B.BHOSALE AND THE HON'BLE MR.JUSTICE B.MANOHAR ITA.NO.318/2013 C/W ITA.319/2013, ITA.320/2013, ITA.321/2013, ITA.322/2013 BBRITWRE 1. The Commissioner of Income Tax,C.R.Building, Queens Road,Bangalore. 2. The Income-Tax Officer,Ward -11(2),Rashtrothana Bhavan,Nrupathunga Road,Bangalore.'Common Appellants (By Sri.K.V.Aravind, Advocate) AN): M/s.Inftormation Technology Park Ltd.,L[st]Floor, Innovator Building,International Tech Park,Bangalore - 560 O66. | Common Respondent (By Sri.T.Suryanarayana, Adv for M/s.King & Partridge) ITA.No.318/2013 This ITA is filed under Sec.260-A of Income Tax)Act 1961, arising out of Order dated 08-03-2013 passedin ITA.No.812/Bang/2012, for the Assessment Year2005-06, praying this Hon’ble Court to: 1.formulate the substantial questions of law.stated therein.stated therein. 11.allow the appeal and set aside the order of.theITAT,BangaloreInITA.No.812/Bang/2012, dated 08-03-2013|confirming the order of the Appellate|Comm issio0neandcontirmthe.order.passed by the Income Tax Officer, Ward-11(2), Bangalore.theITAT,BangaloreInITA.No.812/Bang/2012, dated 08-03-2013|confirming the order of the Appellate|Comm issio0neandcontirmthe.order.passed by the Income Tax Officer, Ward-11(2), Bangalore. ITA.No.319/2013 This ITA is filed under Sec.260-A of Income Tax)Act 1961, arising out of Order dated 08-03-2013 passedin ITA.No.813/Bang/2012, praying this Hon’ble CourtTO: 1.formulate the substantial questions of law|stated therein.stated therein.111.ii allow the appeal and set aside the.orderoT the.ITAT,Bangalore|1nNITA.No.813/Bang/2012, dated 08-03-2013|confirming the order of the Appellate|Comm issio0neandcontirmthe.order.passed by the Income Tax Officer, Ward-11(2), Bangalore.orderoT the.ITAT,Bangalore|1nNITA.No.813/Bang/2012, dated 08-03-2013|confirming the order of the Appellate|Comm issio0neandcontirmthe.order.passed by the Income Tax Officer, Ward-11(2), Bangalore. ITA.No.320/2013 This ITA is filed under Sec.260-A ot Income TaxAct 1961, arising out of Order dated 08-03-2013 passedin ITA.No.814/Bang/2012, for the Assessment Year2007-08, praying this Hon’ble Court to: 1.|formulate the substantial questions of law|stated therein.11allow the appeal and set aside the order oftheITAT,Bangalore|InITA.No.814/Bang/2012, dated 08-03-2013.confirmingtheorderoT|theAppellateCommissioner and confirm the order passedby the Income Tax Officer, Ward-11(2),Bangalore. ITA.No.321/2013 This ITA is filed under Sec.260-A ot Income TaxAct 1961, arising out of Order dated 08-03-2013 passedin ITA.No.815/Bang/2012, for the Assessment Year2008-09, praying this Hon’ble Court to: 1formulate the substantial questions of lawstated therein.stated therein. 11allow the appeal and set aside the appellateorder.oT the.ITAT,Bangalore|1nITA.No.815/Bang/2012, dated 08-03-2013.confirmingthe.orderoT theAppellateCommissioner and confirm the order passed|by the Income Tax Officer, Ward-11(2),Bangalore. ITA.No.322/2013 This ITA is filed under Sec.260-A ot Income TaxAct 1961, arising out of Order dated 08-03-2013 passedin ITA.No.816/Bang/2012, for the Assessment Year2009-10, praying this Hon’ble Court to: 1 |formulate the substantial questions of law|stated therein.stated therein. 11allow the appeal and set aside the appellate|OrderoT|theITAT,Bangalore|in.ITA.No.816/Bang/2012, dated 08-03-2013.confirmingtheorderoT|theAppellateCommissioner and confirm the order passedby the Income Tax Officer, Ward-11(2),Bangalore.OrderoT|theITAT,Bangalore|in.ITA.No.816/Bang/2012, dated 08-03-2013.confirmingtheorderoT|theAppellateCommissioner and confirm the order passedby the Income Tax Officer, Ward-11(2),Bangalore. These appeals coming on for Hearing this day,B.MANOHAR Je9delivered the following: JUDGMANT This ITA is filed under Sec.260-A ot Income TaxAct 1961, arising out of Order dated 08-03-2013 passedin ITA.No.816/Bang/2012, for the Assessment Year2009-10, praying this Hon’ble Court to: 1 |formulate the substantial questions of law|stated therein.stated therein. 11allow the appeal and set aside the appellate|OrderoT|theITAT,Bangalore|in.ITA.No.816/Bang/2012, dated 08-03-2013.confirmingtheorderoT|theAppellateCommissioner and confirm the order passedby the Income Tax Officer, Ward-11(2),Bangalore.OrderoT|theITAT,Bangalore|in.ITA.No.816/Bang/2012, dated 08-03-2013.confirmingtheorderoT|theAppellateCommissioner and confirm the order passedby the Income Tax Officer, Ward-11(2),Bangalore. These appeals coming on for Hearing this day,B.MANOHAR Je9delivered the following: JUDGMANT These Income Tax appeals are filed by the Revenueunder Section 260A of the Income Tax Act, 1961 (forshort ‘the Act’), being aggrieved by the common orderdated 08-03-2013 passed by the Income Tax Appellate Tribunal, “C” Bench, Bangalore (for short ‘tthe Tribunal’)made in ITA Nos.812-816/Bang/2012 whereby theTribunal dismissed the appeals filed by the revenue and confirmed the order dated 28-03-2012 passed by theCommissioner of Income Tax (Appeals)-I, Bangalore,(hereinafterreferred|TOaS|the.FirstAppellateAuthority), wherein the First Appellate Authority heldthat rental income received by the assessee from lettingout buildings along with other amenities in SoftwareTechnology Park falls under the head of °businessincome’' and not under the Income from houseproperty’' while setting aside the order passed by theAssessing Authority for the assessment years 2005-06.to 2OO9-10. oD since the common question of law and facts areinvolved in these appeals and the common order passedby the Tribunal has been challenged, all these appealsare clubbed together and disposed of by this commonorder. 3.|The above appeals are admitted to consider thefollowing substantial question of law: Whether the Tnbunal was correct in.holding that the lease rent received by the|assessee from letting out buildings along with|other amenities in a Software Technology|Park is chargeable to tax under the head‘income from business’ and not under the|head ‘income from house property’ as held by|this Hon’ble Court in Bhoopalam CommercialComplex & Industries and by the Apex Court|in East India Housing & Land Development|Trust Ltd. ? 4Learnedcounselappearingforthe.partiessubmitted that the substantial question of law raised inthese appeals are fully covered by the judgmentreported in|(2013) 218 Taxman 88 (Karnataka)‘in thecase oftCOMMISSIONER OF INCOME TAX-III v/sVELANKANI INFORMATION SYSTEMS (P) LTD 5Division Bench oft this Court in the above saidjudgment at paragraph 26 has clearly held as under: 26............... If the intention is tcommercialpropertyby|puttingupconstruction and letting it out for the purpose|of getting rental income, then notwithstanding|the fact that the furniture and fittings are|provided to the lessee, the income from the.building fall under the head ‘income from| house property’. But if the assessee 1s in the|businessof|takingland, puttingupcommercial buildings thereon and letting out|such buildings with all furniture as his.profession or business, then notwithstandingthe fact that he has constructed a building|and he has also provided other facilities and|even if there are two separate rental deeds, it|does not fall within the heading of income|from house property. Therefore, firstly whatis the intention behind the lease and secondly|what are the facilities given along with the|buildings and documents executed in respect|of each of them 1s to be seen. Thirdly it is to|be found out whether it is inseparable or not.If they are inseparable and the intention is tocarry on the business of letting out the|commercial property and carrying at complex|commercial activity and getting rental income|therefrom, then such a rental income falls|under the heading of profits and gains of|business or profession.” 6. We are in respectful agreement with the judgment oft the Division Bench of this Court. In the instant casesthe assessee-company engaged in the business ofdeveloping, operating and maintaining an industrialpark and providing infrastructure facilities to differentcompanies as its business. In view of that, the ��>�$��$����?���$���������@���������������$�$�����%������� ,���������(��$������&&�������������������� �,�-�������������������������������������������������,�-������������������ $&.�-/�