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TMI Blog2008 (6) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... he conversion from leasehold to ownership led to a pure commercial proposition resulting in a business venture carried out by the assessee company. We find force in the submission of learned counsel that the term 'business', as defined in the provision of infrastructure facility as provided in sub-cl. (iv) of s. 80-IA clearly explains the development and operation of the technology park has not been controverted by the authorities below. The main intention was to exploit the immovable property by way of commercial application which applies to the assessee's case and would leave no room for doubting that the intention of the assessee was in providing software development facility in the electronic city in the industrial area within the limits of Bangalore South District, Bangalore. Any activity undertaken with a profit motive would amount to business and not mere a return on investment when it is exploited. The Tribunal decision was relied upon by the apex Court decision rendered by a Bench consisting of four Judges whereas the decision of the same Court in East India Housing Land Development Trust Ltd. vs. CIT [ 1960 (11) TMI 7 - SUPREME COURT] was rendered by a B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectronics City, Phase-II, Industrial Area, Bangalore by the Karnataka Industrial Areas Development Board. The assessee developed the said land and constructed an information technology park thereon. The information technology park consists of two large blocks of buildings with four floors in each block, service block, cafeteria, library, gymnasium, utilities for staff, restrooms, security, ATM and geodesic dome. Besides landscaping and construction of steel reinforced cement roads and high security compound wall fitted with motorized gate, huge water tank fitted with high pressure pumps, reservoir and sump, borewell, sewage treatment plant, lifts, rain water harvesting system, high standard electrical installation including transformer and generators, air-conditioning, fire fighting and smoke detector equipments, etc. have been provided/installed in the said information technology park by the assessee. 3. The assessee filed its return of income for the impugned assessment year declaring a loss of Rs. 25,30,697. During the course of assessment proceedings, the learned AO considered the case of the assessee by relying on decisions such as CIT vs. Podar Cement (P) Ltd. (1997) 141 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility which is business as has also been held in the case of Tribunal, Bangalore Bench in ITA Nos. 244 to 247/Bang/2007, ITO vs. Mahaveer Shopping Complex when they let out shops in office complex of the assessee concern amounting to business activity. In another decision of the Tribunal, Calcutta Bench in the case of PFH Mall Retail Management Ltd. vs. ITO (2007) 112 TTJ (Kol) 523 : (2007) 16 SOT 83 (Kol), it was held that the income derived from shopping mall/business center is assessable as business income which facts and circumstances are equally applicable to the facts of the assessee's case. Distinguishing Bhoopalam Commercial Complex Industries (P) Ltd. case, he pointed out that rent was received only as lease rent and no additional facilities or services were provided. He pointed out that the land and infrastructure have been provided by the assessee by obtaining loan from United Bank of India who had mortgaged the immovable property by the assessee along with the personal guarantees of the directors. On p. 20 of the paper book as submitted he pointed out the area clearly providing the various amenities by the assessee which fulfil the assessee's contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka Industrial Development Corporation and also obtained loan from Union Bank of India for constructing superstructure thereon which could not be considered as investment in a property for earning rental income only. The lease of the property was shown as part of the business activity, the income received therefrom cannot be said as income received as a land owner but as a trader. In other words, if the property is taken on lease thereafter developed on lease is part of the business activity of the assessee as an owner, then the income has to be treated as business income. The activity was done by the assessee as a business venture and was in accordance with the main object of the company, The intention of any prudent businessman is to earn profit at a maximum level and investment made in the business never lost its main intention for which it was incorporated. The entire cost of construction was by way of obtaining loan which was a risk as adventure in the nature of trade. Therefore, the conversion from leasehold to ownership led to a pure commercial proposition resulting in a business venture carried out by the assessee company. The assessee is providing ward and watch, maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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