TaxTMI 
TaxTMI 
2017 (11) TMI 862
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....g security system, cleaning and maintenance, lighting, repair and maintenance of lifts, provision and management of parking space, firefighting equipment and insurance of the property as per Annexure A of the rent agreement, which represent running and maintenance expenses for the property and regular amenities and facilities for occupants including tenants. 3. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding the rental receipts as Business Receipts by relying on the decision of the Bombay High Court in the case of CIT Vs. Runwal Developers Pvt. Ltd. without appreciating that in the case cited supra, business conducting fees and business facility charges collected from the occupants were treated as rent and held taxable under the head Income from House Property and hence, the reliance is misplaced. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding the rental receipts as Business Receipts by relying on the decision of the ITAT in the case of M/s. Krishna Land Developers Pvt. Ltd. without appreciating that the facts of the said case are completely distinguishable from the facts....
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.... property. The premises in question was specially designed to be operated as a commercial complex with lot of amenities and facilities attached to it, which activity was a part of the objects of the assessee company as provided in the memorandum of association of the company. The Ld. CIT(A) has observed that the main intention of the assessee in this case was to exploit the property by way of complex commercial activities. The assessee had been offering complex services by way of providing amenities such as infrastructure facilities, excalators, power back up, central Air- conditioning, lifts, maintenance of the common area and maintenance of a whole lot of other facilities. The Ld. CIT(A) has listed the various facilities and amenities offered by the assessee to the occupants in the relevant part of his order as reproduced above.. The Ld. CIT(A) has also observed that the amount towards maintenance of the premises and the facilities was paid in advance by the assessee and in fact had made contribution to the corpus of the maintenance of the fund. After analyzing the entire lease agreement and the details of the services and amenities offered by the assessee he arrived at a conclus....
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....s as per its main objects. The otherwise undisputed facts of the case are that the assessee the rental income from leasing of the premises include 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 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. Not only the cost of common facilities has been embedded in the lease rentals but also the substantial amount on account of 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 it, leasing the shops/ area for the purpose of commercial exploitation of the asset, arrange and provide the facilities and amenities not only to the occupants/lessees but also to provide and maintain facilities and amenities in the common areas for the att....
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....e Hon'ble Supreme Court in the case of Karnani Properties Ltd. v. CIT [1971] 82 ITR 547 has laid down the precise tests that are necessary to determine whether the services rendered by an assessee to its tenants/recipients of service, are in the nature of business activities and income generated therefrom assessable as business income, or not. The Hon'ble supreme Court has expressed the view that if the services rendered by the assessee are the results of its activities carried on continuously in an organized manner, with a set purpose and with a view to earn profits, those activities would constitute business activities and the income arising therefrom would 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. ....