The Income Tax Appellate Tribunal (ITAT), the Delhi bench, has held that income derived from car parking is liable for deduction under Section 80IA of the Income Tax Act 1961.
The assessee, Candor Gurgaon Two Developers & Projects Pvt. Ltd. is engaged in the business of developing SEZ in the IT/ITES Sector and lease-out the premises for rent and maintaining the said SEZ.
While scrutinising, the Assessing Officer (AO) refused deduction under Section 80-IAB of the Income Tax Act on income generated through car parking rentals on the declaration that they did not have a direct link with the business operated by the assessee.
Because the assessee had cancelled the employees’ contribution to Provident Fund (PF) after the last date, the return was carried out under Section 143(1) of the IT Act by modifying Section 143(1) amounting to Rs. 6,18,026/-.
The assessee was not satisfied with the order and filed an appeal before the CIT (A) who rejected it. Then assessee filed another appeal against the Commissioner of Income Tax (Appeals) order.
The counsel for the assessee, submitted before the tribunal that the Government of India, Ministry of Commerce and Industry, Department of Commerce issued an instruction No. 50 dated 15th March, 2010. The said instruction was declared and submitted that income by the means of car parking is under the authorised activities according to the guidelines.
Therefore, in order to conduct the business of development, car parking services are of utmost importance and the income earned by the assessee from car parking rentals is considered as business income.
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Additionally, it was stated that communication No. F 2/115/2005-EPZ Government of India, Ministry of Commerce and Industry, Department of Commerce (SEZ Section) dated 30th January 2008 declared that car parking has been considered authorised operations in SEZ.
The Counsel for the Revenue upheld the conclusion derived by the lower authorities. After analysing the matter, the tribunal came to know that car parking rentals have been considered authorised practice in SEZ. Given express guidelines released by the Government mentioned and relied upon, the income from car parking rental would squarely qualify for deduction under Section 80IAB of the Income Tax Act.
The two-member bench comprising Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member) granted the appeal filed by the assessor.
Ajay Kumar Arora was the counsel for the revenue and K.M. Gupta appeared for the assessee.
| Case Title | M/s. Candor Gurgaon Two Developers & Projects Pvt. Ltd. |
| Citation | ITA No. 7839/Del/2018, A.Y. 2011-12, ITA No. 7470/Del/2018, A.Y. 2013-14, ITA No. 2836/Del/2018, A.Y. 2014-15 |
| Date | 14.06.2023 |
| Assessee by | Sh. K.M. Gupta, Adv. And Ms.Saloni Sheetal |
| Revenue by | Sh. Ajay Kumar Arora, Sr. DR |
| Delhi ITAT | Read Order |
