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Issues Involved:
1. Classification of income from leasing and facilities as 'Business Income' or 'Income from House Property'. 2. Allowability of expenses claimed by the assessee under various heads. Detailed Analysis: 1. Classification of Income: The primary issue in this case is whether the income received by the assessee from leasing out a commercial complex and providing additional facilities should be classified as 'Business Income' or 'Income from House Property'. The assessee, a private limited company engaged in real estate and property development, took a vacant land on a 30-year lease and developed it into a commercial complex. The income from leasing this complex and providing additional facilities was claimed as 'Business Income' by the assessee. The Revenue contended that the income should be classified under 'Income from House Property' and that the expenses claimed by the assessee were not allowable. The Departmental Representative argued that the assessee's activities were not complex enough to be considered a business and that the income should be computed under the head 'Income from House Property'. However, the assessee argued that the leasing of the property and the provision of additional facilities were part of its business activities, as outlined in its memorandum of association. The assessee provided various facilities such as watch and ward, maintenance of common areas, supply of water, and provision of lift and standby generator, among others. The assessee cited several judicial precedents to support its claim that the income should be considered as 'Business Income'. The Tribunal found that the assessee had taken the property on lease as a business venture and had developed it into a commercial asset, which was then leased out to various parties. The Tribunal noted that the assessee was not the owner of the land and had to surrender the lease with improvements to the landlord at the end of the lease term. The Tribunal distinguished the facts of the present case from those in the case cited by the Departmental Representative, where the land was held as an investment and no additional facilities were provided. The Tribunal referred to the decision of the jurisdictional High Court in the case of Sri Balaji Enterprises v. CIT, which held that if a property is taken on lease, developed, and leased out as part of the business activity, the income received should be treated as 'Business Income'. The Tribunal also referred to the decision of the Supreme Court in the case of S.G. Mercantile Corpn. (P.) Ltd. v. CIT, which held that the activity of taking a property on lease, setting up a market, and letting out shops and stalls was part of the business activity and the income should be classified as 'Business Income'. Based on these precedents and the facts of the case, the Tribunal concluded that the income earned by the assessee from lease rentals and maintenance charges was 'Business Income'. 2. Allowability of Expenses: Since the income was classified as 'Business Income', the expenses claimed by the assessee under various heads were allowable. The Tribunal noted that the assessee had provided various facilities and services to the tenants and collected charges for the same. These activities were part of the assessee's business operations and the expenses incurred for providing these facilities were allowable as business expenses. Conclusion: The Tribunal dismissed the appeals filed by the Revenue and allowed the appeal filed by the assessee. The income from leasing the commercial complex and providing additional facilities was classified as 'Business Income', and the expenses claimed by the assessee were allowable.
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