R.R. Industries Ltd. v. ITO (OSD)

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The Tax PublishersTax Case (Appeals) Mos. 139 to 145 of 2012 & M. P. Nos, 1 of 2012 (7MPs) 2013 TaxPub(DT) 1864 (Mad-HC) : (2013) 053 (I) ITCL 0436 : (2013) 356 ITR 0097 Income Tax Act, 1961 --Deduction under section 80-IAAllowability Rental income from towers constructed in industrial park--Assessee-company had constructed towers in the industrial park and let them out to software concerns. It claimed deduction under section 80-IA treating the rental income as business income. Assessing officer, however, assessed the income as income from house property and disallowed the assessee's claim for deduction under section 80-IA. According to Commissioner (Appeals), considering the approval of Ministry, assessee was eligible for deduction under section 80-IA(4)(iii) and the head under which income was assessed was not relevant for the purpose of claiming exemption. Tribunal, however, remanded the matter back to assessing officer for re-verification in absence of any material to show that what was pre-dominant in letting out of the building and whether the facilities were incidental. *Held:* Not rightly so, as the issue was squarely covered in the case of CIT v. Cocanada Radhaswami Bank Ltd. (1965) 57 ITR 306 (SC), wherein it was held that when the revenue had accepted the view of the Commissioner (Appeals) on section 80-IA that the assessee had complied with section 80-IA(iii), there remained nothing for an enquiry either as to the nature of the receipt or for that matter the facilities developed to be treated as an industrial park to consider the question of deduction under section 80-IA(4)(iii). Moreso, when the character of the receipt was not a question to be gone into in the matter of considering the claim of deduction under section 80-IA(4)(iii), there would not useful purpose served for the revenue to again insist on a decision on the character of the receipt. Income Tax Act, 1961 Section 80-IA In the Madras High Court Chitra Venkataraman & K. B. K. Vasuki J.J. R. R. Industries Ltd. v. ITO (OSD) Tax Case (Appeals) Mos. 139 to 145 of 2012 & M. P. Nos, 1 of 2012 (7MPs) 2 June, 2013 Appellant by : Aravind P. Dakar, Senior Counsel for N. Settthil Kumar Respondent by : N. V. Balaji JUDGMENT *Chitra Venkataraman J*. The above tax case (appeals), filed at the instance of the assessees against the order of the Income Tax Appellate Tribunal for the assessment years 2002-03 to 2008-09, allowing the Revenues appeals thereby remanding the matter back to the assessing officer for consideration on the question of character of receipt, by raising the following substantial questions of law : '1. Whether the Income Tax Appellate Tribunal has erred in considering an issue, which has attained finality and not been challenged by the respondent in their appeal before the Income Tax Appellate Tribunal ? 2. Whether the Tribunal has the jurisdiction to go into issues (like deduction under section 80-IA(4)) that are not subject matter of the appeal or have never been raised in the grounds of appeal without following the procedure set out in rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 ? 3. Whether the Income Tax Appellate Tribunal is right in setting aside the matter to the files of the respondent when there was no grievance in the appeal of the respondent before the Income Tax Appellate Tribunal ? 4. Whether, in the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in setting aside the matter to the respondent for re-examination without considering the paper books containing details materials filed by the appellant ? SUBSCRIBE FOR FULL CONTENT

The Tax PublishersTax Case (Appeals) Mos. 139 to 145 of 2012 & M. P. Nos, 1 of 2012 (7MPs)
2013 TaxPub(DT) 1864 (Mad-HC) : (2013) 053 (I) ITCL 0436 : (2013) 356 ITR 0097

Income Tax Act, 1961

--Deduction under section 80-IAAllowability Rental income from towers constructed in industrial park--Assessee-company had constructed towers in the industrial park and let them out to software concerns. It claimed deduction under section 80-IA treating the rental income as business income. Assessing officer, however, assessed the income as income from house property and disallowed the assessee's claim for deduction under section 80-IA. According to Commissioner (Appeals), considering the approval of Ministry, assessee was eligible for deduction under section 80-IA(4)(iii) and the head under which income was assessed was not relevant for the purpose of claiming exemption. Tribunal, however, remanded the matter back to assessing officer for re-verification in absence of any material to show that what was pre-dominant in letting out of the building and whether the facilities were incidental. Held: Not rightly so, as the issue was squarely covered in the case of CIT v. Cocanada Radhaswami Bank Ltd. (1965) 57 ITR 306 (SC), wherein it was held that when the revenue had accepted the view of the Commissioner (Appeals) on section 80-IA that the assessee had complied with section 80-IA(iii), there remained nothing for an enquiry either as to the nature of the receipt or for that matter the facilities developed to be treated as an industrial park to consider the question of deduction under section 80-IA(4)(iii). Moreso, when the character of the receipt was not a question to be gone into in the matter of considering the claim of deduction under section 80-IA(4)(iii), there would not useful purpose served for the revenue to again insist on a decision on the character of the receipt.

Income Tax Act, 1961 Section 80-IA

In the Madras High Court

Chitra Venkataraman & K. B. K. Vasuki J.J.

R. R. Industries Ltd. v. ITO (OSD)

Tax Case (Appeals) Mos. 139 to 145 of 2012 & M. P. Nos, 1 of 2012 (7MPs)

2 June, 2013

Appellant by : Aravind P. Dakar, Senior Counsel for N. Settthil Kumar

Respondent by : N. V. Balaji

JUDGMENT

Chitra Venkataraman J.

The above tax case (appeals), filed at the instance of the assessees against the order of the Income Tax Appellate Tribunal for the assessment years 2002-03 to 2008-09, allowing the Revenues appeals thereby remanding the matter back to the assessing officer for consideration on the question of character of receipt, by raising the following substantial questions of law :

'1. Whether the Income Tax Appellate Tribunal has erred in considering an issue, which has attained finality and not been challenged by the respondent in their appeal before the Income Tax Appellate Tribunal ?

2. Whether the Tribunal has the jurisdiction to go into issues (like deduction under section 80-IA(4)) that are not subject matter of the appeal or have never been raised in the grounds of appeal without following the procedure set out in rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 ?

3. Whether the Income Tax Appellate Tribunal is right in setting aside the matter to the files of the respondent when there was no grievance in the appeal of the respondent before the Income Tax Appellate Tribunal ?

4. Whether, in the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in setting aside the matter to the respondent for re-examination without considering the paper books containing details materials filed by the appellant ?