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23. It is also seen from the Assessee's assessment records for AYs 2002-03 and onwards the block of "IT Park buildings" came into being and got recognized for tax purposes for the first time in AY 2002-03 when first phase of Assessee's project known as "Infinity Think Tank" got completed. In the assessment for the year under consideration as also for the earlier years, the nature of Assessee's business is considered as "Development of software Technology Parks and related infrastructure facilities for IT, ITES, Electronics etc". For the purposes of carrying on this business the Assessee had obtained on long term lease basis plots of land in Sector V, Salt Lake City from WEBEL a Govt. of West Bengal Undertaking, After the Assessee obtained the lease hold rights in the lands the Assessee developed its first Information Technology Park building known as Infinity Think Tank at Plot No, A3, Block GP, Sector V, Salt Lake City, Kolkata. The development and construction of the said IT Park building was completed in 2 phases. The first phase of the construction comprising of Tower I was completed ill AY 2002-03 and 2nd phase comprising of Tower II was Completed in AY 2006-07. Besides completing development of the said building the Assessee continued to operate and maintain the said building as Information Technology Park and derive income from lease rent and service charges which is assessed under the head profits & gains of business. The said IT Park was approved by the CBDT as an Industrial Park for the purpose of Sec 80IA(4) of the Act.

24. The Assessee similarly developed another IT Park Building known as Infinity Benchmark situated at Plot G 1, Block- EP&GP, Sector V, Salt Lake City, Kolkata. The development and construction of this IT Park got completed in FY 2008-09 relevant to AY 2009-10. The said IT Park building was also approved by the CBDT u/s 80IA(4) of the Act. The said I T Park was also .being operated and maintained by the Assessee during AY 2012-13 and income in the form of lease rent and service charges was assessed as our business income. These IT Parks comprised constructed spaces which were used for carrying on IT ITES businesses. Some parts of these buildings were leased by the Assessee on long term basis after collecting lump sum lease premium from the lessees. However majority portion of the constructed spaces in these IT parks were leased out by the Assessee on short term basis to numerous lessees who pay monthly lease rent for use of office space. Besides paying monthly lease rent, service charges are also paid by all the occupants for use of the facilities as also for operation and maintenance of the IT Park. The lease rent, maintenance/ service charges recovered from the lessees and occupants are assessed in our assessment under the head "business". The IT Parks developed and constructed by the Assessee not only contain civil structure of the building but substantial costs are incurred by the Assessee on installation and commissioning of sophisticated plants, equipments and electrical apparatus etc so as to make the buildings fit for carrying on specialized Information Technology based businesses and enterprises. The costs incurred by the Assessee on development and construction of IT Parks were always capitalized in the Assessee's books arid shown in the audited annual accounts as and by way of "Fixed Assets" and not as "Current Assets" or "stock-in-trade" as alleged in show cause notice dated 20.9.2016 u/s.263 of the Act. By using these fixed assets the Assessee regularly earns Income in the form of lease rent and service charges. Since commencement of operations of the IT Parks in AY 2002-03 and onwards the income so derived from commercial exploitation of IT Parks has been assessed by the AOs under the head 'profits & gains of business". Since such business income is earned by the Assessee by use of the "IT Park" owned and developed by the Assessee, in terms of section 32 of the I T Act, depreciation on the actual cost/ WDV of the depreciable assets comprised in the IT Park has always been allowed in the orders passed u/s 143(3) of the Act.

1. Infinity Infotech Parks Ltd., Plot A-3,Block-GP, Sector-V, Salt Lake Electronic Complex, Kolkata-700091.

2. D.C.I.T., Circle-2(1), Kolkata.

3. CIT-I, Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

True copy By order Senior Private Secretary Head of Office/ D.D.O. ITAT, Kolkata Benches