Income from letting out shopping mall, cinema theatre, multiplex classified as business income

The Tribunal determined that income from letting out a shopping mall, cinema theatre, and multiplex center should be classified as business income based on the respondent's partnership deed outlining business activities related to properties and real estate management. The Tribunal applied the Chennai Properties & Investment Limited case precedent, concluding that the income does not fall under "Income from house property." The appeal was dismissed without costs.

---

---

Issues:
1. Classification of income from letting out shopping mall and Cinema Theatre as "Income from house property" or "business income."

Analysis:
The main issue in this case revolves around determining the nature of income derived from letting out a shopping mall, cinema theatre, and multiplex center. The Revenue argued that the income should be classified as "Income from house property," while the assessee contended that it should be considered as "business income." The respondent, a partnership firm engaged in construction, maintenance of mall, and providing amenities, offered the income under the head of business or profession. However, the Assessing Officer categorized it as "Income from house property."

The respondent's appeal to the Commissioner of Income Tax (Appeals) was dismissed, leading to a further appeal to the Tribunal. The Tribunal observed that the activity of letting out building premises constituted the respondent's business activity. It noted that the respondent's partnership deed outlined objectives related to dealing with properties, constructing real estate, multiplex centers, and managing the same. Relying on the object clause in the partnership deed, the Tribunal referenced the Chennai Properties & Investment Limited case to determine the nature of income. The Tribunal concluded that the income should be treated as business income, not income from house property, based on the business activities outlined in the partnership deed.

Given the application of the Supreme Court decision in the Chennai Properties & Investment Limited case to the present scenario, the proposed question of law was deemed unsubstantial and not entertained. Consequently, the appeal was dismissed, with no order as to costs being made.

---