TaxTMI 
TaxTMI 
2016 (7) TMI 504
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....h provision of other services, amenities and facilities constituted the business carried on by the assessee; (b) there was a commercial exploitation of the property in distinction to mere letting out, leading to the income being characterized as business income. 1.3 The decision relied on by the learned Principal Commissioner of Income tax, Bangalore 5, Bangalore is distinguishable on both facts and law. 1.4 On facts and in the circumstances of the case and law applicable, income / loss from the business of operation and maintenance of Forum Value Mall, Whitefield, Bangalore is assessable under the head 'Profits and gains of business' as declared by the assessee in the return of income and as assessed to tax by the learned assessing officer in the order passed under section 143(3) for the year under consideration. 2.1 Without prejudice, the learned Principal Commissioner of Income tax, Bangalore 5, Bangalore, has erred in concluding that the assessment order passed by the assessing officer is erroneous and prejudicial to the interests of the revenue under section 263 of the Income tax Act, 1961. 2.2 On the facts and in the circumstances of the case and law ap....
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....ed or unfurnished, if the intention was to receive rental income then such income would be assessable under the head 'income from house property'. He held that the assessment done by the AO was not only erroneous but also prejudicial to the interests of Revenue. As per the Pr. CIT, assessee's income had to be assessed under the head 'income from house property'. He set aside the order with a direction to the AO to do the assessment afresh after giving an opportunity to the assessee. 05. Aggrieved by the above order, assessee is now before us in appeal. Ld. Counsel for the assessee submitted that AO during the course of assessment proceedings had issued a notice dt.24.12.2012, u/s.142(1) of the Act, placed at page 25 of the paper book. According to him specific questions regarding break-up of rental income received by the assessee, party-wise break up of the lease deposits, details of expenditure incurred and details of sundry creditors were raised. As per the Ld. AR, through its reply placed at page 28 of the paper book, assessee had given all the above details including sample lease deeds. Further as per the Ld. AR, sample lease deeds, copies of which have been placed at paper ....
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.... to him, judgment of Hon'ble Apex Court in the case of Shambu Investments P. Ltd (supra) clearly applied. Facilities provided by the assessee were basic essential facilities that was sine qua non for renting out the property. As per the Ld. DR there was nothing special in providing such services and the AO had taken a patently unlawful view. As per the Ld. DR AO had not applied his mind and never made enquiries though he had received the copies of the lease deeds from the assessee. Absence of enquiry, rendered the order of the AO erroneous and prejudicial to the interests of Revenue. Reliance was placed on the Hon'ble Madras High Court in the case of CIT v. Chennai Properties & Investments Ltd [(2015) 266 ITR 685], that of Hon'ble Madras High Court in the case of Keyaram Hotels Ltd v. DCIT [ 373 ITR 494], that of Hon'ble Calcutta High Court in the case of CIT vs. Maithan International [375 ITR 123] and that of Calcutta High Court in the case of CIT v. Active Traders P. Ltd [214 ITR 583]. 07. We have perused the materials and heard the rival contentions. Notice issued by the AO during the course of original assessment proceedings has been placed at paper book page 25 and 26. Page....
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....s and in the circumstances of the case the Tribunal is justified in law in holding that the rental income received from Forum Mall. Eva Mall and UB City should be treated as "Income from Business" and not as "Income from House Property" despite a specific agreement between the landlord and tenant contemplating a landlord tenant relationship and rental income being paid every month as held by the Apex Court in the case of Shambhu Investments (263 ITR 143)? 12. Their Lordship had followed the judgment in the case of CIT v. Velankani Information Systems (P) Ltd [(2013) 218 Taxman 88], and held that when the intention was to carry on the business of letting out commercial property and complex commercial activity resulting in rental income, then such rental income would fall under the head profits and gains of business of profession. Thus we cannot say that the view taken by the AO was one which was not possible under law. 13. Coming to the judgment of Hon'ble Calcutta High Court in the case of Maithan International (supra), relied on by the Ld. DR, question there was whether there was inadequate enquiry which led the AO to assume incorrect facts that rendered the order erroneous ....