DCIT Vs Advant IT Park Private Ltd. (ITAT Delhi)
Characterisation of Rental Receipts from IT Parks – Business Income or House Property?; IT Park Receipts Treated as Business Income Due to Commercial Exploitation; Lease Rent Reclassified as Business Income Based on Nature of Activity; Lease Rent Reclassified as Business Income Based on Nature of Activity; Composite IT Park Operations Qualify for Business Income Treatment; CBDT Circular Cannot Deny Business Income Without Factual Analysis; Consistency Principle Applied in Head of Income Classification Dispute; IT Park Leasing With Services Held as Organised Business Activity; ITAT Delhi Reaffirms Commercial Exploitation Test and Principle of Consistency
The Delhi Bench of the Income Tax Appellate Tribunal, Delhi Bench in Deputy Commissioner of Income Tax, Central Circle-1, Noida v. M/s Advant IT Park Private Limited (and vice-versa), decided on 22 January 2026, has examined the long-standing controversy relating to the correct head of income applicable to receipts arising from leasing of commercial infrastructure along with provision of integrated facilities and services. The decision is significant in the context of IT Parks, business centres and commercial complexes where rental receipts are intertwined with continuous operational and infrastructural support.
The dispute arose from assessments completed under section 143(3) for Assessment Years 2016-17 to 2018-19, wherein the Assessing Officer re-characterised the income declared by the assessee as business income into income from house property and income from other sources. The assessee company was incorporated with the principal object of developing, operating and maintaining Software Technology Parks and IT Parks and providing comprehensive infrastructure facilities to occupants. Pursuant to allotment of land by NOIDA, the assessee developed an IT Park strictly in accordance with institutional norms, with the predominant area earmarked for IT and IT-enabled services and the balance for ancillary facilities.
