RR INDUSTRIES LIMITED Vs. INCOME TAX OFFICER (OSD)

JUDGEMENT

(1.) THE above Tax Case (Appeals), filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal for the assessment years 2002 -03 to 2008 -09, allowing the Revenue's appeal thereby remanding the matter back to the Assessing Officer for consideration on the question of character of a receipt, by raising the following substantial questions of law:

(2.) IT is seen from the facts narrated that the assessee is a company engaged in the business of manufacture and export of leather goods. Subsequently, it diversified its business into developing, operating and maintaining an Industrial Park and leasing out the premises after making suitable alterations as required by the lessee. Admittedly, the assessee, being a developer of industrial park was duly recognised by Investment Promotion & Infrastructure Development Cell of the Secretariat of Industrial Assistance of the Department of Industrial Policy & Promotion in Ministry of Commerce and Industry, the Government of India under the Industrial Park Scheme, 1999 framed by the Central Government under Section 80IA(4) of the Income Tax Act. The recognition was given as early as August 2001. It is stated by the assessee that it constructed towers in the Industrial Park and let them out to software concerns providing a platform with plug and play infrastructure. Pointing out to the various facilities offered in the buildings let out treating the rental income as business income, the assessee claimed deduction under Section 80IA of the Income Tax Act. The Assessing Officer however rejected the contention of the assessee and assessed the income as income from the house property and disallowed the assessee's claim for deduction under Section 80IA of the Act. This led to the assessee filing an appeal before the Commissioner of Income Tax (Appeals).

(3.) IT is seen from the order of the Tribunal that the Revenue challenged the view of the Commissioner of Income Tax (Appeals) only on his holding the income derived from letting out of industrial park buildings as income from business as against the finding made by the Assessing Officer that it was to be treated as income from house property. Admittedly no question was raised on the view of the Commissioner that irrespective of the character of the receipt, the deduction was available. On considering the nature of the receipt, the Tribunal agreed with the submission of the assessee that income derived by developing and operating or maintaining an industrial park was assessable under the head of Profit and Gains of business or profession as could be inferred from the provisions of Section 80IA(4)(iii) of the Act. Pointing out to the view of the Commissioner of Income Tax (Appeals) that the relief under Section 80IA(4)(iii) of the Act would be available even if the property in question was treated as income from house property, the Tribunal held that the assessee as well as the Revenue had not brought out any materials to show that the facilities developed by the assessee after completion of the development was treated as an industrial park by any authority and it was not clear that whether the alleged industrial park was so notified by the Central Government or not. In the absence of any material to show that what was predominant in the letting out of the building and whether the facilities were incidental, the Tribunal viewed that it was necessary to restore the issue back to the Assessing Officer for proper verification. Aggrieved by this, the above appeals by the Revenue.