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Income from property acquired for letting out is "income from business"

In Mack Soft Tech Pvt.Ltd., Hyd vs Dcit Hyderabad, the appeal was filed by the assessed against the order of the CIT (A)-4, Hyderabad dated 30.01.2015 confirming the assessment order passed u/s 143(3) r.w.s. 92CA r.w.s. 144C of the I.T. Act, wherein the AO has assessed income derived by the assessee from the business of operation and maintenance of information Technology Park as "Income from house property".

The assessed argued that the company was allotted/sold land by the APIIC to be used only for the specific purpose of setting up IT facility i.e., IT software, IT enabled service and IT infrastructure and that the assessee has developed an integrated business facility thereon called "Q-city" which has been exploited as a commercial asset in the business carried on by it and accordingly, the learned C.I.T(Appeals) ought to have held that the income derived by the assessee from the IT park is assessable as income from business.

The Appellant Tribunal referring to the Hon'ble Supreme Court judgment in  CIT vs. Chennai Properties & Investments Ltd and Rayala Corporation (P) Ltd, the Hon'ble Tribunal held that the main business of the assessee is to create the infrastructure and let out the same to earn income therefrom. Therefore, the decisions in the above cases before the Hon'ble Supreme Court are clearly applicable and directed the AO to treat the income from letting out and operation of ITA No 445 of 2015 Mack Soft Tech P Ltd Hyderabad the property as "income from business" and allow the expenditure and other claims in accordance with the law.

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