The Delhi bench of the Income Tax Appellate Tribunal Observed that allows deduction under Section 80-IAB of Income Tax Act 1961 for car parking income, Health club income, food court income and Interest income
The issue to be decided was whether AO disallowed u/S 80-IAB of Income Tax Act 1961 deduction on car parking income, income from health club, income from food court and interest income CIT (A) confirmed the disallowance.
On the facts and in the circumstances of the case, & in law, the CIT (A) has erred in confirming the denial of deduction u/S 80- IAB of Income Tax Act 1961 on car parking income of Rs.38,53,200, income from health club of Rs.33,93,477, income from food court of Rs.48,56,499 and interest income of Rs.47,63,700 totaling to Rs.1,68,66876. The Appellant prays that the Ld. AO be directed to delete the denial of deduction of Rs.1,68,66,876 under section 80-IAB of the Act 1961
Counsels for the assessee K.M. Gupta and Saloni Shital submitted that these sources of income are linked to the main activities of the assessee and referred to Paper Book Page No.89 where by Notification of the Government of India dated 27th October 2006, certain operations were listed to be used by the Board of Approval while approving authorized operations in the SEZ. This list included parking, club house, shopping arcade, convention center, etc.
Counsels of the assessee referred to the ITAT decision in assessee’s group cases ( supra ) where similar disallowances have been decided in favour of the assessee
Per contra, Counsel Vivek Kumar Upadhyay for the Revenue could not dispute the aforesaid proposition.
The two member bench of the tribunal comprising Kul Bharat ( Judicial member ) and Shmim Yahya ( Account member ) observed that in the case of M/s. Candor Gurgaon Two Developers and Projects Pvt. Ltd. has allowed u/S 80- IAB of Income Tax Act 1961 deduction in similar circumstances by holding that the issue is covered in favour of the assessee by Supreme Court judgment in the case of Meghalaya Steels Ltd. Vs. CIT ( 2016 ) In the same order, ITAT has allowed deduction towards u/S 80-IAB of Income Tax Act 1961 towards car parking rental in favour of the assessee.
The bench finds that the above instances are assessee’s group cases and cover the issue in favour of the assessee. Accordingly, we hold that the assessee is entitled to deduction u/S 80-IAB of Income Tax Act 1961 towards car parking income, income from health club, income from food court and interest income. This issue is decided in favour of the assessee.
In the result, the assessee’s appeal was partly allowed.
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