The Above Appeals Were Admitted On The Followingsubstantial Questions Of Law v. M/S. Tidal Park Ltd., 4, Rajiv Gandhisalai, Taramani, Chennai – 600 113] Wherein This Bench Held Asfollows

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 16.07.2021 CORAM: THE HON'BLE MR. JUSTICE M.DURAISWAMYAND THE HON'BLE MRS.JUSTICE R.HEMALATHA T.C.A.Nos.887 to 889 of 2016 The Commissioner of Income Tax,Company Circle III (2)Chennai – 600 034.... Appellant in all TCAsVs. M/s.Tidel Park Limited,No.4, Rajiv Gandhi Salai,Taramani, Chennai – 600 113.... Respondent in allTCAs Appeals preferred under Section 260A of the Income Tax Act,1961, against the order of the Income Tax Appellate Tribunal,Madras, "D" Bench, dated 19.02.2016 in I.T.A.Nos.1554, 1555 &1556/Mds/2014 for the Assessment Year 2006-07 & 2009-10 againstthe Order of the office of the Commissioner of Income Tax(Appeals)-III dated 17.03.2014 in I.T.A.No.1502/13-14, for theAssessment year 2006-07; dated 24.03.2014 in I.T.A.No.1447/13-14, for the Assessment year 2006-07 and dated 24.03.2014 inI.T.A.No.1446/13-14,for the Assessment year 2009-10, madeagainst the Order dated 08.12.2008, 26.12.2011 and 26.12.2011 inGIR No/PAN AABCT066R passed by the Assistant Commissioner ofIncome Tax, Company Circle III(2), Chennai-34, respectively. (Judgment was delivered by M.DURAISWAMY, J.) Challenging the orders passed in I.T.A.Nos.1554, 1555 &1556/Mds/2014 in respect of the Assessment Year 2006-07 & 2009-10 on the file of the Income Tax Appellate Tribunal, Chennai,"D" Bench, the Revenue has filed the above appeals. https://hcservices.ecourts.gov.in/hcservices/ 2.The only issue in the appeals of the Revenue is that theIncome Tax Appellate Tribunal erred in holding that the leaserent income received from letting out modules of SoftwareTechnology park to various lessees would constitute income frombusiness and eligible for deduction under Section 80IA of theAct. 3.The above appeals were admitted on the followingsubstantial questions of law: “a)Whether on the facts and in the circumstancesof the case, the Income Tax Appellate Tribunal wasright in holding that the income derived from lettingout of property to the tenants as 'income frombusiness' in the hands of the owner of the property?b)Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was rightin holding that the income from letting out of buildingcomprising of communication and various otherfacilities as income from 'business' assessable underSection 28?” 4.When the appeals were taken up for hearing, Mrs.V.Pushpa,learned Standing Counsel appearing for the appellant/Revenuefairly submitted that the questions of law that arose forconsideration in the above appeals were already decided againstthe Revenue and in favour of the assessee in the judgment dated14.06.2021 made in T.C.A.No.16 of 2014 [The Commissioner ofIncome Tax, Chennai. Vs. M/s. Tidal Park Ltd., 4, Rajiv GandhiSalai, Taramani, Chennai – 600 113] wherein this Bench held asfollows: “... 2.The above appeal was admitted on the followingsubstantial questions of law:"Whether the Tribunal was right in holding thatthe income derived from letting out of property to thetenants for the purpose of running a softwaretechnology park is 'income from business'?”3.When the appeal is taken up for hearing,Mr.M.Swaminathan, learned Senior Standing Counsel forthe appellant/Revenue fairly submitted that the issueinvolved in the above appeal has already been decidedby the Hon'ble Division Bench of this Court, by itsJudgment dated 07.07.2020 in T.C.A. No.732 & 733 of2018, wherein the Hon'ble Division Bench held asfollows:-8.So far as Substantial Question of Law No.1 isconcerned, it has to be seen as to whether theincome derived from letting out of the property inan industrial park/SEZ including the amenities and the income received by the owners for such propertyand the amenities therein would be business income in the hands of the owner of theproperty. the income received by the owners for such propertyand the amenities therein would be business income in the hands of the owner of theproperty. 9.We need not labour much on this issue, onaccount of the circular No.16 of 2017 issued by theCBDT dated 25.04.2017. The CBDT after taking note ofthe two decisions of the Karnataka High Court heldthat it is now a settled position that in the caseof an undertaking which develops, develops andoperates or maintains and operates an industrialpark/SEZ notified in accordance with the schemeframed and notified by the Government, the incomefrom letting out the premises / developed spacealong with other facilities in an industrialpark/SEZ is to be charged to tax under the head'Profits and Gains of Business. 10.As rightly pointed out by Mr.R.VijayaRaghavan, the emphasis is on not only letting out ofthe premises / developed space but along with otherfacilities in an industrial park/SEZ. The tribunalin this regard followed a decision of the DivisionBench of this Court in the case of CIT Vs. ElnetTechnologies Limited, reported in (2013) 30Taxmann.com 63 (Mad). In the said decision, atparagraph No.11, the Division Bench, has held asfollows: "11. In considering whether the incomearising on the leasing of the property wasbusiness of the assessee, one has to get intothe nature of the business of the assessee, tofind out the receipts are assessable under thehead of income from house property or asbusiness income and if receipts does not fall inany of those classified heads, would fallconsideration under the residuary head of incomeas income from other sources." 11.After referring to the decision in the caseof CIT Vs. Chennai Properties and InvestmentsLimited, reported in (2005) 274 ITR 117, it waspointed out that income derived from letting out ofthe property with all amenities and facilities wouldbe income from business and cannot be assessedeither as income from house property or as incomefrom other sources. The said decision of the Hon'bleDivision Bench was appealed against by the revenuebefore the Hon'ble Supreme Court in SLP No.11638 of2013 and we are informed that the appeal wasdismissed on 27.01.2020 on the ground of Low TaxEffect. 12.Considering all those facts as wells as thecircular issued by CBDT, substantial question of lawNo.1, has to be answered against the revenue and infavour of the assessee. The Tax Case Appeals are dismissed and theSubstantial Questions of Law are answered againstthe revenue. No Costs.Further, the learned Senior Standing Counsel submittedthat in view of the ratio laid down by the Hon'bleDavison Bench of this Court in the Judgement citedsupra, the question of law that has been raised by theRevenue in this appeal may be decided against theRevenue and in favour of the respondent/assessee. 4.Mr.Vijayaraghavan Vikram, learned counselappearing for the respondent submitted that in view ofthe Judgement of the Division Bench of this court citedsupra, the appeal may be dismissed. 5.Having regard to the submissions made by thelearned counsel on either side, following the ratiolaid down by the Hon'ble Division Bench of this Courtreported in T.C.A.No.732 and 733 of 2018, the questionsof law is decided against the appellant/Revenue and infavour of the respondent/assessee. Accordingly, the TaxCase Appeal is dismissed. No costs.” 5.Mr.R.Vijayaraghavan, learned counsel appearing for therespondent/assessee submitted that in view of the judgment ofthe Division Bench of this Court made in T.C.A.No.16 of 2014,the appeals may be dismissed. 6.Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down in thejudgment dated 14.06.2021 made in T.C.A.No.16 of 2014 (citedsupra), the questions of 5.Having regard to the submissions made by thelearned counsel on either side, following the ratiolaid down by the Hon'ble Division Bench of this Courtreported in T.C.A.No.732 and 733 of 2018, the questionsof law is decided against the appellant/Revenue and infavour of the respondent/assessee. Accordingly, the TaxCase Appeal is dismissed. No costs.” 5.Mr.R.Vijayaraghavan, learned counsel appearing for therespondent/assessee submitted that in view of the judgment ofthe Division Bench of this Court made in T.C.A.No.16 of 2014,the appeals may be dismissed. 6.Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down in thejudgment dated 14.06.2021 made in T.C.A.No.16 of 2014 (citedsupra), the questions of law are decided against the Revenue and in favour of theassessee. Accordingly, the Tax Case Appeals are dismissed. Nocosts. Sd/-Assistant Registrar(CS-VII) // True Copy// Sub Assistant Registrar va https://hcservices.ecourts.gov.in/hcservices/ To 1.The Income Tax Appellate Tribunal, Chennai, "D" BenchChennai, "D" Bench 2. The Commissioner of Income Tax(Appeals)-IIIChennai-34Chennai-34 3.The Assistant Commissioner of Income Tax,Company Circle (III) 2,Chennai – 34Company Circle (III) 2,Chennai – 34 +1cc to Mr.M.Swaminathan , Advocate, S.R.No.34494 T.C.A.Nos.887 to 889 of 2016 AK-II(CO)SU(06/08/2021)SU(06/08/2021)