AI Drafter 
TaxTMI 
TaxTMI 
2011 (6) TMI 771
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....rned CIT (A) has erred in directing to treat income from letting out of studio under the head 'Profits and Gains of Business or Profession' instead of income under the head 'income from house property' by not relying upon the decision in the care of CIT vs. Sultan Brothers Pvt. Ltd. reported in 51 ITR 353. 2. The relevant material facts, so far as necessary for adjudication on issue in dispute before us, are like this. The assessee is stated to be carrying out business of letting out of studio for producing television serials, advertisement films, short documentaries etc., in as much as the premises is let out, for the said purposes, on hourly basis for a unit of eight hours each to production houses. During the course of scrutiny....
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.... be provided as per client requirements, and that considerable marketing activities have to be undertaken to sell the studio time to prospective clients. The assessee also submitted a list of clients so as to demonstrate that the studio facilities have been used by film industry, TV industry and generally media and broadcasting industry. None of these submissions, however, impressed the Assessing Officer. He was of the view that, on the above facts, issue is covered against the assessee by Hon'ble Supreme Court's judgment in the case of CIT vs. Shambhu Investments Ltd. (263 ITR 143), because 'if it is found that main intention is for letting out the property or any portion thereof, the same must be considered as rental income or income from....
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....me is business. However, it is very clear from the facts of the case that without the said facilities, the premises would not have been let in the first place. The ratio laid down by the Hon'ble Apex Court is totally applicable to the facts of the case. 4. As regards assessee in contention that studio business activities are activities in an organized manner, Assessing Officer simply brushed them aside by stating that the contention 'is general in nature'. On the contention that assessee is rendering complex services, the Assessing Officer observed that 'the assessee is covered by the Calcutta High Court in the case of Shambhu Investments Ltd. vs. CIT (supra)'. The Assessing Officer thus proceeded to tax receipts under the head income fr....
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....posit from its clients, the main objective of the assessee is to commercially exploit the said property for earning the income. The facts discussed above coupled with the fact that the assessee has obtained service tax registration for the income earned from hiring out of bungalow/studio, it becomes quite clear that the assessee is engaged in the commercial activities of earning of such income. The AO, is therefore, directed to treat the receipts of the assessee of Rs. 28,89,573/- as business receipts and not to treat the same as income from house property. The ground of appeal is allowed. 5. The Assessing Officer is not satisfied by the stand so taken by the Ld. CIT (A), and is in appeal before us. 6. We have heard the learned Depart....
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....tor renting of premises but significant value addition to premises by providing all incidental and support services to facilitate cine shooting and related activities, the income is earned by complex commercial activities which can only be taxed under the head business income. The fact that it is clearly a commercial adventure, involving marketing and promotions as also appropriate improvisations on a case to cases basis, takes these receipts out of the ambit of income under the head property income. Similarly, as regards classification of the nature of payments in the TDS certificates, nothing on turns on the same because the nature of payment, as the law is well settled, need not be the same in the hands of the recipient as in the case of....
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....hus no conflict between these two judgments; quite to the contrary, Shambhu Investments (supra) judgment merely follows law laid down by Hon'ble Supreme Court in the case of Sultan Brothers. Secondly, in the case of Sultan Brothers (supra), Their Lordships were in seisin of a case in which no services were being rendered by the assessee, there was no business at all, and the true question was under which head income from rental was to be taxed when building is let out with furniture and fillings. The assessee's plea that it should be taxable as business income, which was not anyway decided in favour of the assessee by Hon'ble High Court either, was rejected at the threshold itself, and then Their Lordships dealt with the issue as to whether....