Delhi ITAT: Rental Income from Car Parking is Deductible Under Section 80IA 

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has ruled that income obtained from car parking is eligible for deduction under Section 80IA of the Income Tax Act 1961.

Candor Gurgaon Two Developers & Projects Pvt. Ltd., the taxpayer in question, is involved in the development of SEZ (Special Economic Zone) in the IT/ITES Sector and leases out the premises while also maintaining the said SEZ.

During scrutiny, the Assessing Officer denied the deduction u/s 80-IAB for the income earned from car parking rentals, stating that it lacked a direct connection with the taxpayer's business operations.

As the assessee had withdrawn the employees' contribution to the Provident Fund (PF) after the specified deadline, the return was processed under Section 143(1) of the Income Tax Act. This resulted in a modification of Section 143(1) amounting to Rs. 6,18,026/-.

However, the assessee was dissatisfied with the order and appealed to CIT (A), but the appeal was rejected. Subsequently, the assessee filed another appeal against the order of the Commissioner of Income Tax (Appeals).

During the tribunal proceedings, the counsel representing the assessee presented an argument stating that the Government of India, Ministry of Commerce and Industry, Department of Commerce, had issued Instruction No. 50 on 15th March 2010. The counsel referred to this instruction to establish that income derived from car parking falls under authorized activities according to the provided guidelines.

Hence, the provision of car parking services holds significant importance for carrying out the development business, and the income generated by the assessee through car parking rentals is classified as business income.

The appeal filed by the assessor was granted by a two-member bench consisting of Anil Chaturvedi (Accountant Member) and Anubhav Sharma (Judicial Member). Ajay Kumar Arora represented the revenue as the counsel, while K.M. Gupta appeared on behalf of the assessee.

Case Name: 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

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