The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that income from car parking rental is eligible for Deduction under Section 80IA of Income Tax Act 1961.
The assessee Candor Gurgaon Two Developers and Projects Pvt.Ltd is in the business of developing SEZ in IT/ITES Sector and lease-out the premises for rent and maintaining the said SEZ.
During the scrutiny proceedings, the AO denied deduction under Section 80-IAB of the Income Tax Act on income from car parking rentals on the allegation that they did not have direct nexus with the business carried on by the assessee.
The Return was processed under Section 143(1) of the Income Tax Act by making an adjustment under Section 143(1) amounting to Rs 6,18,026/- since the assessee had remitted the employees’ contribution to Provident Fund (PF) beyond the due date.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)[CIT(A)] who dismissed the appeal. Against the CIT(A) order, the assessee filed appeal before the tribunal.
Before the tribunal counsel for the assessee submitted that an instruction No.50 dated 15th March, 2010 issued by Government of India, Ministry of Commerce and Industry, Department of Commerce was averted and was submitted that income by way of car parking is part of authorized activities as per the guidelines.
Hence, car parking services are an essential part of carrying out the business of development and the assessee has earned income from car parking rentals as business income.
Further it was also mentioned the communication No. F 2/115/2005-EPZ Government of India, Ministry of Commerce and Industry, Department of Commerce (SEZ Section) dated 30th January, 2008 and was asserted that car parking has been included as part of authorized operations in SEZ.
Counsel for the revenue supported the decision of the lower authorities.
Upon reviewing the details, the tribunal observed that car parking rentals have been reckoned as authorized operation in SEZ. In the light of express guidelines issued by the Government as referred to and relied upon,it was that the income from car parking rental would squarely qualify for deduction under Section 80IAB of the Income Tax Act.
Hence, the bench consists of two members Anil Chaturvedi (Accountant Member) Anubhav Sharma (Judicial Member) allowed the appeal filed by the assessee.
Ajay Kumar Arora, counsel appeared for the revenue. K.M.Gupta counsel appeared for the assessee .
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
