2021 (12) TMI 560

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....ssee is a company engaged in the business of construction, leasing operating and maintaining a mixed used Mall by the name of Ahmedabad One in Gujrat, which they have leased out to various tenants and earning rental income as well as income from other sources in the shape of infrastructure support serviced by providing certain services to them. For the assessment year 2014-15, they have filed their return of income on 30.09.2014 declaring a loss of Rs. 5,57,64,309/-. By order dated 29.12.2016 u/s. 143(3) of the Income-tax Act, 1961 (for short "the Act"), ld. Assessing Officer held the income offered from infrastructure support services as income from house property instead of treating it as profits and gains from business or profession and ....

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....reasons, ld. DR submitted that the ld. CIT(A) erred in treating the revenue from infrastructure support services as profit and gains from business or profession and therefore, it need to be reversed. 4. Submissions of the ld. AR on this aspect are two-fold. In so far as the merit is concerned, he submits that the assessee is free to arrange their business to enter into different agreements for different purposes and as much as the assessee entered one agreement for letting out the demised premises and another for services for hiring of equipments, it is not open for the Assessing Officer to go beyond the agreements and to say that there will not be any meaningful letting out of the property without equipments and therefore, the entire re....

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....existence of two agreements is concerned, absolutely, there is no dispute. It is also not in dispute that for the assessment year 2011-12, 2012-13 and 2015-16 also, the assessee offered the receipts under the two streams, namely, rental income earned from leasing out the space within the mall to the tenants and offering the same under the head 'income from house property' and the other is income from business activities of maintaining, operating and providing equipments essential for operation of mall, i.e., infrastructure support services under the head ' profit and gain from business or profession'. It is also not in dispute that for the assessment year 2011-12 and 2012-13, by order dated 16.12.2015 and 18.02.2015, the Assessing Officer a....

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....the genuineness of the transaction or the correctness of the quantum of expenditure. Revenue cannot prevent the assessee from entering into separate agreements. At best Revenue can verify the quantum of expenditure claimed by the assessee in respect of the services provided or the expenditure related to the hired equipment. 13. When the assessee had chosen to bifurcate the transaction and to charge separately towards the rent of the demised premises and for the services provided and hire charges, in our considered opinion the Revenue cannot prevent the same on the ground that such process would result in loss to the Revenue. In the circumstances, we hold that the action of the authorities below not to permit the assessee to arrange....