TaxTMI 
TaxTMI 
2021 (10) TMI 564
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....tinguishable from the said case. 2.2 The Id.CIT(A) has failed to observe that the MOA of the assessee's case is clearly distinguishable from that of Chennai Properties MOA. 2.3 The Ld. CIT(A) erred in not applying the rationale of the Decision of the Apex Court in the case of Raj Dadarkar & Associates VS. ACITJ2017] (394 ITR 592) (SC). 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the Assessing Officer restored." 3. The brief facts of the case are that the assessee-company has constructed a commercial property on Khadar Nawaz Khan Road of Nungambakkam area and has given shops on lease to various persons. The assessee has admitted the lease income received by the assessee as a business income. According to the A.O, the assessee has let out only shops and the income has to be offered under the income from house property by observing as under: "The submissions of the assesee were carefully perused and came to the opinion that the rent received in the case of Chennai properties and investment ltd., was held by the Hon'ble Supreme Cou....
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....udgment of Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd. v. CIT (supra), he has observed that the assessee-company is fully entitled to show its income under the head business income and claim corresponding expenses thereon. The action of the A.O in bringing the income for taxation under the head house property is rejected and the income shall continue to be taxed under the head business as declared by the assessee. 5. On being aggrieved, the Revenue is in appeal before the Tribunal. 6. The Ld. Departmental Representative has submitted that the Ld. CIT(A) has followed the decision of the Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd. v. CIT (supra), without considering the subsequent judgment of Hon'ble Supreme Court in the case of Raj Dadarkar & Associates Vs. ACIT [2017] 394 ITR 592 (SC) and strongly supported the order passed by the A.O. 7. On the other hand, the ld. Counsel for the assessee has submitted that the assessee-company incorporated in August, 2007, under the provisions of Companies Act, 1956 with its first object being to purchase, own or otherwise acquire by way of mortgage, lease, license in India or....
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....esorts, restaurants, casinos, clubs, inns, taverns, golf courses, factory, warehouse, godowns and quarters, 3) To carry on the business of advising, dealing, broking, consulting, managing, marketing, housekeeping, investing in India or elsewhere in all kinds of properties including flats, public residential complexes, homes, residences, bungalows, apartments, condominiums, offices, office space, commercial space, shopping malls, shopping complexes, auditoriums, factories, tenements, parks, townships, Infrastructure Projects, multiplexes, tech parks, IT parks, parks, Special Economic Zones(SEZ), hotels, resorts, restaurants, casinos, clubs, inns, taverns, golf courses, factory, warehouse, godowns and quarters. 10. The assessee is also having incidental or ancillary objects to the attainment of main objects, which is at Sr. No.12 & 19 of Memorandum of Association are as under: "12. To acquire property and rights which the Company may think necessary or convenient for the purposes of its business or otherwise and in particular to build, construct, purchase, alter, enlarge, dismantle, maintain, remove or replace and to work, manage, hire and control, any land, buildings, of....
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....perty is exploited to earn the income. In this case, the commercial building was exploited to earn the rental income. Moreover, if any income clearly be charged to any head, it should be taxed under that head of income only. If any income is not able to charge to any particular head, then it should be charged under the head income from other sources as it is residuary head of incomes. From the above, the opinion of the A.O is that the assessee has constructed only one building and let out the same to the various tenants. Therefore, as per s. 22 of the Income Tax, 1961, it has to be taxed as income from house property. The A.O in fact has ignored the main object of the company and also various services and facilities provided by the assessee. By considering the entire facts of this case, we are of the opinion that the income earned by the assessee in this case has to be taxed income from business and the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd. v. CIT (supra). In so far as the case law relied on by the Ld. D.R in the case of Raj Dadarkar & Associates Vs. ACIT (supra) is concerned, the Hon'ble Jurisdic....
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....st instance, that merely because there is an entry in the object clause of the business showing a particular object, would not be the determinative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT, (1964) 5 SCR 807." (emphasis supplied). 16. In view of the settled legal position above, with which we respectfully agree, we do not find any later and recent contrary view of the aforesaid legal position. The earlier decisions rendered by Madras High Court, based on its views in CIT v. Chennai Properties and Investment Pvt. Ltd. [(2004) 266 ITR 685], cannot be now relied upon by the learned counsel for the Revenue, in view of the reversal of the said judgment by the Supreme Court in M/s. Chennai Properties and Investment Pvt. Ltd. v. CIT [(2015) 373 ITR 673 (SC)]. The other judgments relied upon by the Revenue are also rendered in different context. 17. We are of the clear opinion that once the property in question is used as business asset and the exclusive business of the asse....
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....above judgment and observed that where particular income has to be determined whether it is income from house property or business income it is depend upon the facts and circumstances of the each case. In the present case, by considering the objects of the assessee and also various other facilities provided by the assessee, we are of the opinion that the income of the assessee has to be treated as income from business and the decision of the Hon'ble Supreme Court in the case of Raj Dadarkar & Associates Vs. ACIT (supra), has no application to the facts of the present case. 15. The Hon'ble Kerala High Court In the case of CIT v. Thiruvananthapuram v. Oberon Edifices & Estates (P.) Ltd. (supra), has held that where primary intention of the assessee for letting out the shops in a mall was commercial exploitation of the property, income derived from the sale would be assessed as 'income from business' not as 'income from house property'. 16. The Hon'ble High Court of Bombay in the case of PCIT v. Krome Planet Interiors (P.) Ltd. (supra), has held that where the assessee leased out shops in a mall along with various other facilities and amenities, in view of the fact that it was n....