{"id":9155,"date":"2017-04-26T14:11:01","date_gmt":"2017-04-26T08:41:01","guid":{"rendered":"http:\/\/www.itatonline.org\/info\/?p=9155"},"modified":"2017-04-26T14:11:26","modified_gmt":"2017-04-26T08:41:26","slug":"cbdt-circular-explains-law-on-whether-lease-rent-from-industrial-parksez-is-assessable-as-business-profits","status":"publish","type":"post","link":"https:\/\/itatonline.org\/info\/cbdt-circular-explains-law-on-whether-lease-rent-from-industrial-parksez-is-assessable-as-business-profits\/","title":{"rendered":"CBDT Circular Explains Law On Whether Lease Rent From Industrial Park\/SEZ Is Assessable As Business Profits"},"content":{"rendered":"<p>The CBDT has issued Circular No. 16\/2017 dated 25.04.2017 in which it has considered the issue whether income arising from letting out of premises \/developed space along with other amenities in an Industrial Park\/SEZ is to be charged under head \u2018Profits and Gains of Business\u2019 or under the head \u2018Income from House Property\u2019. The issue has been the subject manner of litigation in recent  years. The assessees claim the letting out as business activity and that the income arising therefrom has to be charged to tax under the head \u2018Profits and Gains of Business\u2019. The Assessing Officers hold it to be chargeable under the head \u2018Income from House Property\u2019.<\/p>\n<p><script async src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\"><\/script><br \/>\n<!-- responsive --><br \/>\n<ins class=\"adsbygoogle\"\n     style=\"display:block\"\n     data-ad-client=\"ca-pub-6440093791992877\"\n     data-ad-slot=\"6406297397\"\n     data-ad-format=\"auto\"><\/ins><br \/>\n<script>\n(adsbygoogle = window.adsbygoogle || []).push({});\n<\/script> <\/p>\n<div class=\"journal2\"><a href=\"https:\/\/www.itatonline.org\/info\/cbdt-circular-explains-law-on-whether-lease-rent-from-industrial-parksez-is-assessable-as-business-profits\/cbdt-circular-letting-property-biz-profits\/#dlcenter\" rel=\"attachment wp-att-9156\">Click here to download CBDT Circular No. 16\/2017 dated 25.04.2017<br \/>\n<\/a>\n<\/div>\n<blockquote><p>Circular No. 16\/2017<\/p>\n<p>F. No. 279\/Misc.\/140\/2015\/ITJ<br \/>\nGovernment of India<br \/>\nMinistry of Finance<br \/>\nDepartment of Revenue<br \/>\nCentral Board of Direct Taxes<br \/>\nNew Delhi, 25th April, 2017<\/p>\n<p>SUBJECT: Lease rent from letting out buildings\/developed space along with other amenities in an Industrial Park\/SEZ\u2013 to be treated as business income.<\/p>\n<p>The issue whether income arising from letting out of premises \/developed space along with other amenities in an Industrial Park\/SEZ is to be charged under head \u2018Profits and Gains of Business\u2019 or under the head \u2018Income from House Property\u2019 has been subject manner of litigation in recent  years. Assessees claim the letting out as business activity, the income arising from which to be charged to tax under the head \u2018Profits and Gains of Business\u2019 , whereas the Assessing Officers hold it to be chargeable under the head \u2018Income from House Property\u2019.<\/p>\n<p>2. The matter has been considered by the Income from the Industrial Parks\/ SEZ established under various schemes framed and notified under section 80IA(4)(iii) of the Income-tax Act, 1961 (\u2018Act\u2019) is liable to be treated as income from business provided the conditions prescribed under the schemes are met.<br \/>\nIn the case of Velankani Information Systems Pvt Ltd (NJRS Citation (2013-LL-0402-44), the Hon\u2019ble Karnataka High Court observed that any other interpretation would defeat the object of section 80IA of the Act and government schemes for development of Industrial Parks in the country. SLPs filed in this case by the Department have been dismissed by the Hon\u2019ble Supreme Court.<br \/>\nIn a subsequent judgment  dated  30.04.2014 in ITA No 76 &#038; 78\/2012 in the case of CIT vs. Information Technology Park Ltd. (NJRS Citation (2014-LL-0430-141), the Karnataka  High Court has reaffirmed  its\u2022 earlier views. It has held that, since the assessee-company was engaged in the business of developing, operating  and  maintaining  an  Industrial Park and providing  infrastructure facilities to different companies as its business, the lease rent received by the assessee from letting out buildings along with other amenities in a software technology park would be chargeable to tax under the head \u201cIncome from Business\u201d and not under the head \u201cIncome from House Property\u201d. The judgement has been accepted by the Board.<\/p>\n<p>In view of the above, it is now a settled position that in the case of an undertaking which develops, develops and operates or maintains and operates an industrial park\/SEZ notified in accordance with the scheme framed and notified by the Government, the income from letting out of premises\/ developed space along with other facilities in an industrial park\/SEZ is to be charged to tax under the head \u2018Profits and Gains of Business\u2019.<\/p>\n<p>4. Accordingly, henceforth, appeals may not be filed by the Department on the above settled issue and those already filed may be withdrawn\/ not pressed upon.<\/p>\n<p>5. The above may be brought to the notice of all concerned.<\/p>\n<p>(D.S. Chaudhry),<br \/>\nCIT (A&#038;J), CBDT,<br \/>\nNew Delhi<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>The CBDT has issued Circular No. 16\/2017 dated 25.04.2017 in which it has considered the issue whether income arising from letting out of premises \/developed space along with other amenities in an Industrial Park\/SEZ is to be charged under head \u2018Profits and Gains of Business\u2019 or under the head \u2018Income from House Property\u2019. The issue has been the subject manner of litigation in recent  years. The assessees claim the letting out as business activity and that the income arising therefrom has to be charged to tax under the head \u2018Profits and Gains of Business\u2019. The Assessing Officers hold it to be chargeable under the head \u2018Income from House Property\u2019<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/info\/cbdt-circular-explains-law-on-whether-lease-rent-from-industrial-parksez-is-assessable-as-business-profits\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1,7],"tags":[],"class_list":["post-9155","post","type-post","status-publish","format-standard","hentry","category-all-information","category-others"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts\/9155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/comments?post=9155"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/posts\/9155\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/media?parent=9155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/categories?post=9155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/info\/wp-json\/wp\/v2\/tags?post=9155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}