Deputy Commissioner of Income Tax, Central Circle-1, Noida vs. M/s Advant IT Park Private Ltd.

Parties Involved

Facts Summary

The assessee, M/s Advant IT Park Private Ltd., is a company incorporated to develop, operate, and rent out IT/Software Parks and provide comprehensive infrastructure and allied facilities. The company constructed two towers in Sector-142, Noida, and received permission from the Ministry of Communication and Technology Department for STP units under the Software Technology Park Scheme. The assessee took the entire receipts, including lease rent, hire charges, and maintenance charges, as income under the head 'Profits and Gains from Business or Profession'. However, the Assessing Officer (AO) treated the lease rent as 'Income from House Property' and hire charges and maintenance as 'Income from Other Sources', arguing that the assessee was not notified as an Industrial Park/SEZ by the CBDT. The Learned Commissioner of Income Tax (Appeals)-3, Noida (CIT(A)) allowed the assessee's appeal by holding the entire income as business income.…

Legal Issues

• 1. Whether the CIT(A) erred in deleting the addition of income under the heads 'Income from House Property' and 'Income from Other Sources' by reclassifying the same as 'Business Income'.
• 2. Whether the CIT(A) erred in admitting additional evidence during appellate proceedings in contravention of Rule 46A of the Income Tax Rules, 1962.
• 3. Whether the CIT(A) erred in accepting the objects narrated in the Memorandum of Association (MOA) while concluding that the income is business income.
• 4. Whether the CIT(A) erred in misinterpreting CBDT Circular No. 16/2017.
• 5. Whether the CIT(A) erred in not appreciating that the assessee failed to furnish any notification/approval recognizing the project as SEZ/Industrial Park.
• 6. Whether the CIT(A) erred in not appreciating that the predominant source of income was lease rental from immovable property.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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