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TMI Blog2015 (8) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... ’s objects are not in respect of letting of any particular property, but it has the main objects of acquiring, constructing, operating and maintaining of the multiplexes, business center, marriage halls etc. The very object is the commercially exploitation of the properties. Besides that the assessee is also providing hosts of amenities and facilities, as discussed above, which amounts to composite business activity. Thus the issue is squarely covered in favour of the assessee by the above noted decisions of the Hon’ble Supreme Court. We therefore hold that the income/loss from the multiplex is liable to be assessed as “business income/loss" and not as "income from house property". The assessee consequently is also entitled to the claim of deductions in respect of expenditure incurred and depreciation on assets etc. in relation to such income. - Decided in favour of assessee. - ITA No. 640/M/2014, ITA No. 2196/M/2013 - - - Dated:- 14-8-2015 - Shri R. C. Sharma And Shri Sanjay Garg,JJ. For the Petitioner : Shri V. Mohan, A. R. For the Respondent : Shri Neil Philip, D. R. ORDER Per Sanjay Garg, Judicial Member: The above titled appeals have been preferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t TV Monitoring'(CCT'). It has been thus submitted that assessee s prime motive in embarking on this project was not just to give property on rent but to exploit the same as a commercial venture with business motive and hence attached a lot of importance in concentrating more on providing added amenities with touch of world class facilities added to the venture which will be evident from the amount of investments made in construction and assembly of amenities that were to be made available to tenants. The following amounts were incurred towards capital cost for providing various amenities: Air-Conditioners Rs.3,54,40,455 Electrical Fittings Rs.6,38,53,663/- Escalator Rs.1,38,93,405/- Special Tiling Rs.1,09,81,232/- Hardware Materials ₹ 64,75,106/- ---------------------- Rs.13,06,43,861/- The assessee has further explained that besides the above, substantial portion of Iron and Steel cost, Cement cost and labour cost incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. in ITA No.822/PN/2011 and C.O.No.04/PN/2012 dated 18.09.2012 (Hon'ble lTAT Pune) (ix) CIT vs. Runwal Developers Pvt. Ltd. (Bombay High Court) (ITA No.4984, 4240 4241 of 2010) (x) ACIT vs. Saptarshi Services Ltd. (265 ITR 379) (Guj) (xi) CIT vs. Mohiddin Hotels (P) Lid. Anr. (284 ITR 229) (Born.) 4. The Ld. CIT(A), however, has observed in the impugned order that the amenities provided by the assessee in the multiples were the normal facilities that were required to be provided in the building to make it fit for occupation by the tenant. He has further opined that certain other provisions/facilities viz. provision for firefighting equipments, sprinklers, hydrants, elevators etc. have been provided as required under rules and regulations of the local authority/municipal authority. He has further observed that even if certain cosmetic additions viz. false ceiling or glass facade etc. have been made to the building they are in the nature of cost incurred on the improvement of the building. The alleged amenities have no independent existence without the building which has been let out. He therefore held that the primary purpose of the assessee was to let out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial income for providing amenities/facilities to the occupants/tenants. The assessee s activity thus can not be said to be mere letting of the building owned by it but its activity is a business activity of construction of mall, maintaining it, leasing the shops/ area for the purpose of commercial exploitation of the asset, arrange and provide the facilities and amenities not only to the occupants/lessees but also to provide and maintain facilities and amenities in the common areas for the attraction, convenience and comfort of the customers/visitors. In our view, as per the modern day trends of retail business and customer preferences, not only the quantum of rent/income from the multiplex but also the very letting of the premises depends upon the provisions of facilities and amenities provided taking into consideration not only the need and requirements of the business entities/occupants but also the comfort zone of the customers/visitors. The activity of construction of multiplex and cinema theatre, its maintenance and providing amenities and facilities therein, thus can not be said to be mere letting out of the property but in our view is a composite business activity. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a company with its professed objects and the manner of its activities and the nature of its dealings with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned. The Hon'ble Supreme Court thus has emphasized the professed objects and the manner of activities carried out by an assessee. It has also been pointed out that the nature of dealings with the property would also be factor to determine whether the activities fall for consideration under the head `'business income'' or house property income . The Hon ble Supreme Court thus noticed the aforesaid principle and applied the same to the facts of the case before it. The facts of the case before the Hon ble Supreme Court were that as per the memorandum of association, the main objects of the appellant company was to acquire and hold the properties known as Chennai House and Firhavin Estate both in Chennai and to let out those properties as well as make advances upon the security of lands and buildings or other properties or any interest therein. In the return that was filed, the entire income which accrued and was assessed in the said return was f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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