TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 886
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....rship firm (wrongly written by the AO as company) engaged into the business of construction and maintenance of mall, letting out premises on lease and providing amenities therein and exhibition of feature films at multiplex. The assessee constructed a Multiplex complex in Bhayander (West) comprising of multiplex theatres, shops, entertainment and game zone, kiosk, food court, etc. which was commissioned in the previous year ending on 31.03.2009 relevant to the assessment year 2009-10. The assessee offered income/loss from the above activity as under the head' Income from business or profession' whereas the Assessing Officer treated the same as "Income from house property.' The above action of the AO has been further confirmed by the CIT(A). The assessee has thus come in appeal before us. 3. The Ld. AR of the assessee, has brought our attention to the written submissions filed before the Ld. CIT(A) wherein it has been explained that that the assessee is operating Multiplex with 6 screens and parking facilities and balance area is given on rent wherein food court and shops are located. He has been further explained that since, on the films exhibited in the Multiplex screens, enterta....
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....lex, the same should be assessed under the head 'Business' since as the object behind pursuing the activity in the complex was with the view to carry on business activity and commercially exploit fixed assets deployed therein. The assessee also relied upon the following judicial decisions before the ld. CIT(A): (i) DCIT vs. Manmit Arcade (P) Ltd. *Hon'ble ITAT, Bangalore+ 93 TTJ 463) (ii) Sri Balaji Enterprises vs. CIT (1997) 140 CTR (Kar) 61 (iii) CIT vs. Bhoopalan Commercial Commercial Complex & Industries (P) Ltd. (2003) 183 CTR (Kar.) 275 (iv) S.G. Mercantile Corpn. (P) Ltd. vs. CIT 1972 CTR (SC) 8 (v) PFH Mall & Retail Management Ltd. vs. ITO, Ward 8(3), Kolkata (112 TTJ 523) (Honble ITAT, Kolkata) (vi) ITO, Ward 19(3)(4), Mumbai vs. Shanaya Enterprises in ITA No.3648/M/2010 dated 30.06.2011 (Hon'bte ITAT, Mumbai) (vii) Mukherjee Estates (P) Ltd. vs. CIT (244 ITR 1) (viii) DCIT, Circle-3, Pune vs. Magarpatta Township Development & Construction Co. in ITA No.822/PN/2011 and C.O.No.04/PN/2012 dated 18.09.2012 (Hon'ble lTAT Pune) (ix) CIT vs. Runwal Developers Pvt. Ltd. (Bombay High Court) (ITA No.4984, 4240 & 4241 of 2010) (x) ACIT vs. Saptarshi Service....
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....A perusal of the above reveals that not only the very purpose of formation of the assessee firm but also its objects specifically include the construction of Multiplex Center, Entertainment Complex, Commercial Center and their operation and management. 7. The otherwise undisputed facts of the case are that the assessee along with leasing of the premises is also earning substantial income from providing amenities and facilities. Such facilities are not the basic facilities required for occupation or renting of a building or premises, but these are the special facilities for running of the multiplex/ shopping mall and cinema theatre and food court etc. and are meant to attract the customers and provide comfort of shopping to them. These facilities can not be said to be basic/normal facilities required for occupation of the premises. The cost of common facilities has been embedded in the lease rentals whereas the assessee is also receiving substantial income for providing amenities/facilities to the occupants/tenants. The assessee's activity thus can not be said to be mere letting of the building owned by it but its activity is a business activity of construction of mall, maintaining....
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....ould be assessable as business income under section 28 of the Act. The activities of the assessee in this case in providing the various services/facilities/amenities meet all the aforesaid four requirements laid down by Hon'ble Supreme Court to qualify as business activities. 9. In a very recent judgment, the Hon'ble Supreme Court in the case of "Chennai Properties & Investment Ltd.' [2015] 373 ITR 673(SC) has noted that in its (Supreme court) earlier Judgment in the case of "Karanpura Development Co. Ltd. Vs. CIT'" 44 ITR 362 (SC), the position of law on this issue has been summed up in the following words:- "As has been already pointed out in connection with the other two cases where there is a letting out of premises and collection of rents the assessment on property basis may be correct but not so, where the letting or sub-letting is part of a trading operation. The diving line is difficult to find; but in the case of a company with its professed objects and the manner of its activities and the nature of its dealings with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned." The Hon'ble Supreme Cour....