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TMI Blog2015 (8) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... t, resultant income must be assured assessed as income from house property but if main intention is found to be exploitation of property by way of commercial activities, then resultant income must be held as business income. Where assessee company has developed shopping malls/business centres on properties owned by it and let out same by providing host of services/facilities/amenities in the said mall/business centres, it can be said that basic intention of assessee was commercial exploitation of its properties by developing them as shopping malls/business centres, therefore, income derived therefrom is assessable as business income. In the instant case before us there is no dispute that as per memorandum of Association of the company it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared by assessee as income from business. - Decided in favour of assessee. - ITA No.4891/Mum/2008, ITA No.6635/Mum/2009, ITA Nos.126 to 128/Mum/2010, ITA No.7636/Mum/2012 - - - Dated:- 21-1-2015 - SHRI R.C.SHARMA AND SHRI VIVEK VARMA, JJ. For The Revenue : Shri Jitendra Kumar For The Assessee : Ms. Vasanti Patel Shri Nilesh Joshi ORDER PER R.C.SHARMA (A.M.) : These are the appeals field by the Revenue and assessee against the order of CIT(A) for assessment years 2001-02, 2002-03, 2004-05, 2005-06, 2006-07 2009-10, respectively. 2. Since the only common issue involved in all the years under consideration, relates to treating the income from house property as business income, therefore, all these appeals were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore there is no simple landlord and tenant relationship between the appellant company and the lessee. Since, there is no change of the party in the lease agreement i.e. M/sper Stop Ltd. and since there is no fresh agreement also for the same even after acquiring the property, it is clear that the intention of the appellant has not gone for a change and it remains the earlier one ony i.e. to exploit commercially by way of complex commercial activities generating the business income as earlier as it is part and parcel of the appellant s business activity only. Thus, it is held that the income has rightly been assessed in the earlier years as business income and even in view of the decision of the Hon ble Supreme court in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grounds are consequential in nature and therefore dismissed accordingly. However, the Ld. Assessing officer is directed to follow the law laid down by Hon ble Supreme Court in the case of CIT Vs. Ranchi Club Ltd. (2001) 114 Taxman 414 (SC)/Ranchi Club Ltd. Vs. CIT{1996] 217 ITS 72/85 Taxman 201 (Pat) CIT Vs. Kwality Biscuits Ltd. (2006) 155 Taxman 658 (SC) while charging the interest u/s.234A, 234B 234C. In the result, the appeal is partly allowed. 4. Learned DR relied on the order of the AO and submitted that the assessee is the owner of the premises and has given the same on lease rent, therefore, the income earned from the same should be held as income from property. Ld. DR further submitted that the Memorandum of Associatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . From the record we found that the AO treated the income from commercial exploitation of assets as income from house property on the plea that impugned property has been acquired by the assessee during the year whereas the same, was taken by them on lease in earlier year. Merely because income is attached to a property it cannot be a sole factor for assessing such income as income from house property and it has to be seen that whether it was the primary objective of the assessee to exploit the property in a simple manner or to exploit it commercially i.e. to exploit it by way of complex commercial activities to arrive at the generation of income that could be taxed under the head income from house property or as income from business. If it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee has not gone for a change and it remains the earlier one only i.e. to exploit commercially by way of complex commercial activities generating the business income as part and parcel of the assessee s business activity only. 7. The Hon ble Supreme Court in the case of Karnani Properties Ltd. v. CIT, (1971) 82 ITR 547 very succinctly enunciated the unique characteristics of a business activity. The Apex Court has laid down precise tests that are necessary to determine whether the services rendered by an assessee to its tenants/recipients of service, are in the nature of business activities and income generated therefrom assessable as business income, or not. The Hon ble Court expressed the view that if the services rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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