TaxTMI 
TaxTMI 
2019 (8) TMI 1431
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....isions of law and the facts in the case of the appellant. The appellant submits that it be so held now. 2.0 The Commissioner of Income tax (Appeals) erred in upholding that Rs. 9,28,81,991/- was assessable under the head income from house property as against under the head profit and gains of business returned by the appellant. 2.1 The assessing officer ought to have assessed income of Rs. 9,28,81,991/- under the head profit and gains of business. Rs. 9,28,81,991/- be assessed under the head profit and gain of business. 3.0 The appellant without prejudice to above submits that it had let on hire machinery, plant etc. and letting of the building is inseparable from letting of the machinery, plant etc. The CIT(A) therefore ought to have held that income of Rs. 9,28,81,991/- was chargeable to tax under the head income from other sources under provisions of section 57(2)(iii). The CIT(A) further ought to have allowed deductions for expenses and depreciation u/s 57. The appellant submits that it be so held. 4.0 The appellant submits that each and every expenditure debited to the Profit and Loss account and considered in computation of the total income was incurred wholly and....
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....ame of Navratna S.G. Highway Properties Pvt Ltd. The income is classified in two different heads, i.e. (i) Mall Operating Revenue and (ii) Common Area Maintenance Revenue. The assessee has also claimed all the business expenditure against such income. The Assessing Officer noted that the assessee has taken deposit from all the parties to whom the areas were leased out in the mall premises. It was in this backdrop that the Assessing Officer required the assessee to show-cause as to why the income from business should not be treated as income from house property. The assessee made elaborate submissions in response to the show-cause notice and, inter alia, pointed out that the income has been derived not only from leasing out of the properties simpliciter, but also on account of complex integrated services which have generated the revenue in question. He also pointed out that, in a mall, apart from providing the place for operating business, various services such as security, cleanliness, housekeeping, repairs and maintenance, electrification, maintenance of the elevators, security to building round the clock, vehicle parking services and other services are to be provided. Assessee ha....
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.... the fact that the assessee derived the Rent income which is liable to be treated under the head of House Property only and can be bring to tax under the head of Business Income. 4.4. The assessee stated in its reply dated 13.03.2013 that it puts reliance on the decision K.Dev Co. Ltd Vs. CIT reported at 44 ITR 362 (SC) and in case of Sheetal Khurana Food Ltd. Vs. ITAT reported at 11 Taxman.com 68 wherein Hon'ble Punjab & Haryana High Court held that where the transactions of leasing is involving the business operations the income falls under the head business income and one has to consider all the factors for the purpose of deriving whether it is business operations or not. The assessee further stated that it has provided several services and business facilities to the lessees and all the business activities namely leasing of the units and providing other various services are inseparable and under the circumstances each and every revenue is business trading recept and has been considered accordingly. The assessee further relied upon the principle settled by the Hon'ble Supreme Court in the case of Sultan Bros. Pvt Ltd. Vs. CIT reported at 51 ITR 353. The assessee put reliance o....
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....tisfied that the assessee has furnished inaccurate particulars of its income and hence penalty proceedings u/s. 271(1)(c) of the Act is initiated separately for furnishing inaccurate particulars on this count." 5. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. Learned CIT(A) was of the considered view that the assessee has undoubtedly given services to the persons occupying business premises in the mall, but then he has also charged Common Area Maintenance charges (CAM) as well. Under these circumstances, the CIT(A) was of the view that the entire income cannot be treated as business income. He also noted that as evident from Form No. 26AS of the appellant, the tenants have made Tax Deducted at Source (TDS) under section 194-I, which supports the view of the Assessing Officer treating the income under the head 'income from the house property'. The action of the Assessing Officer was thus confirmed. The assessee is aggrieved and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. We have noted th....
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....s received from unit holders. The fact that these unit holders treat these charges as rent simpliciter and tax deducted at source under section 194-I cannot determine the question of taxability in the hands of the recipient. In the business model embedded by the operation of the shopping mall, as we have pointed out earlier, a complex web of integrated services are to be provided and the consideration received from those occupying the business premises is not simply as such rent for the premises. As we hold so, we find support from Hon'ble Supreme Court's judgment in the case of CIT vs. E City Real Estate (P.) Ltd., [2018] 100 taxmann.com 94 (SC), wherein Their Lordships has, inter alia, observed as follows:- "14. In the present case, the facts are otherwise. The substantive income of the Assessee is from leasing out the shop/stalls. 15. The Tribunal in its Judgment, while appreciating the facts, has observed that the various malls are built by Assessee and are operated from the year 2001. The operational income received from the said activity, in the form of rent, and other service charges was consistently offered to tax as its business income in the earlier years and the sa....
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....ant to attract the customers and provide them the comfort and convenience of shopping. In cases where the income received is not from the bare letting out the property but on account of the facilities and services rendered, the operations involved in such letting out is in the nature of business and the income derived therefrom has to be treated as business income and not income from property. The income derived by the assessee cannot be regarded as simply from the exercise of property right. Where the assessee company has developed the shopping mall and let out the same by providing a variety of services, facilities and amenities in the mall, it can be found that the primary intention of the assessee was commercial exploitation of the property and where it has derived substantial part of its income by such activity, which constitutes its main business, the income so derived would be business income of the assessee. We, therefore, agree with the view of the Tribunal that the income derived by the assessee by letting out the shops in the mall has to be assessed as income from business and not as income from house property. 28. On the basis of the discussion above, we find that th....