The Commissioner Of Income Tax,Chennai v. M/S. Tidal Park Ltd.,4, Rajiv Gandhi Salai,Taramani,Chennai – 600 113

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 14.06.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS.JUSTICE R. HEMALATHA Tax Case Appeal No.16 of 2014 The Commissioner of Income Tax,Chennai. ... Appellant v. M/s. Tidal Park Ltd.,4, Rajiv Gandhi Salai,Taramani,Chennai – 600 113. ... Respondent Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the order of the Income Tax AppellateTribunal, Madras "D" Bench, dated 03.06.2013 passed inI.T.A.No.1198/Mds/2010 against the order dated 30/4/10 made inITA No.591/09-10/A-111 on the file of the Commissioner ofIncome Tax (Appeals) III Chennai and against the order dated18/12/09 made in GIR No.PAN (32335-7) on the file ofthe Additional Commissioner of Income Tax, Company Circle IIIChennai. For Appellant : Mr.M.Swaminathan, Senior Standing Counsel For Respondent : Mr. Vijayaraghavan Vikram (Delivered by M.DURAISWAMY, J.) Challenging the order dated 03.06.2013 passed by theIncome Tax Appellate Tribunal, Madras "D" Bench inI.T.A.No.1198/Mds/2010, in respect of the assessment year2007-2008, the Revenue has filed the above appeal. 2. The above appeal was admitted on the followingsubstantial questions of law: " Whether the Tribunal was right in holdingthat the income derived from letting out ofproperty to the tenants for the purpose of runninga software technology park is 'income frombusiness'?”https://hcservices.ecourts.gov.in/hcservices/ 3. When the appeal is taken up for hearing,Mr.M.Swaminathan, learned Senior Standing Counsel for theappellant/Revenue fairly submitted that the issue involved inthe above appeal has already been decided by the Hon'bleDivision Bench of this Court, by its Judgment dated 07.07.2020in T.C.A. No.732 & 733 of 2018, wherein the Hon'ble DivisionBench held as follows:- 8. So far as Substantial Question of Law No.1 isconcerned, it has to be seen as to whether the incomederived from letting out of the property in anindustrial park/SEZ including the amenities and theincome received by the owners for such property andthe amenities therein would be business income in thehands of the owner of the property. 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 case ofan undertaking which develops, develops and operatesor maintains and operates an industrial park/SEZnotified in accordance with the scheme framed andnotified by the Government, the income from lettingout the premises / developed space along with otherfacilities in an industrial park/SEZ is to be chargedto 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 tribunal inthis regard followed a decision of the Division Benchof 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 income arisingon the leasing of the property was business ofthe assessee, one has to get into the nature ofthe business of the assessee, to find out thereceipts are assessable under the head ofincome from house property or as businessincome and if receipts does not fall in any ofthoseclassifiedheads,wouldfallconsideration under the residuary head ofincome as income from other sources." CIT Vs. Chennai Properties and Investments Limited,reported in (2005) 274 ITR 117, it was pointed outthat income derived from letting out of the propertywith all amenities and facilities would be incomefrom business and cannot be assessed either as incomefrom house property or as income from other sources.The said decision of the Hon'ble Division Bench wasappealed against by the revenue before the Hon'bleSupreme Court in SLP No.11638 of 2013 and we areinformed that the appeal was dismissed on 27.01.2020on the ground of Low Tax Effect. 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 aredismissed and the Substantial Questions of Law areanswered against the revenue. No Costs. Further, the learned Senior Standing Counsel submitted that inview of the ratio laid down by the Hon'ble Davison Bench ofthis Court in the Judgement cited supra, the question of lawthat has been raised by the Revenue in this appeal may bedecided against the Revenue and in favour of therespondent/assessee. 4. Mr. Vijayaraghavan Vikram, learned counsel appearingfor the respondent submitted that in view of the Judgement ofthe Division Bench of this court cited supra, the appeal maybe dismissed. 5.Having regard to the submissions made by the learnedcounsel on either side, following the ratio laid down by theHon'ble Division Bench of this Court reported in T.C.A.No.732and 733 of 2018, the questions of law is decided against theappellant/Revenue and in favour of the respondent/assessee.Accordingly, the Tax Case Appeal is dismissed. No costs. Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal, Madras "D" Bench.https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Income Tax (Appeals)-III Chennai. Chennai. 3. The Additional Commissioner of Income Tax, Company Circle -III, Chennai. Company Circle -III, Chennai. +1cc to Mr..M.Swaminathan, Advocate SR.No.27820 +1cc to Mr.Subbaraya Aiyar, Advocate SR.No.27813 Tax Case Appeal No.16 of 2014 RSV(CO)GMY(09/07/2021)