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TMI Blog2016 (6) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mohan Alankamony, Accountant Member For the Revenue : Sh. P. Radhakrishnan, JCIT For the Assessee : Shri S. Sridhar, Advocate ORDER Per N. R. S. Ganesan, Judicial Member I.T.A. No.402/Mds/2013 is filed by the Revenue for the assessment year 2003-04 and other appeals, viz. I.T.A. No.1095/Mds/2014, I.T.A. Nos.2215 2216/Mds/2015 are filed by the assessee for assessment years 2010-11, 2006-07 and 2009-10. Since common issue arises for consideration in all these appeals, we heard these appeals together and disposing of the same by this common order. 2. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee-company is a joint owner of a commercial complex. According to the Ld. counsel, the assessee let out the commercial complex along with amenities to various persons and received rental income and charges for amenities. In the earlier assessment year, the assessee claimed the entire income as income from business. However, the Assessing Officer classified the entire rental income as income from house property. On further appeal, the same was also confirmed by this Tribunal and the High Court. In fact, for the assessment year 2001-02, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness. Accordingly, the CIT(Appeals) for the assessment year 2003-04 found that 75% of the rental receipt as income from house property and the balance 25% was claimed as income from business. Against this order of the CIT(Appeals), for the assessment year 2003-04, the Revenue has filed the appeal. 3. Coming to the assessment years 2010-11, 2006-07 and 2009-10, the CIT(Appeals) confirmed the order of the Assessing Officer holding that the rental income from letting out the commercial complex, including the amenities, is assessable under the head income from house property and not under the head business income . Against these orders of the CIT(Appeals), the assessee has also filed appeals. 4. Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee let out a luxurious commercial complex along with several amenities. Referring to the copies of the lease deed, the Ld.counsel submitted that the assessee has not only provided lift to the building but it also has to maintain the lift. The assessee is providing internal security to the building, regulating the car parking and also taking care of day-to-day maintenance. Therefore, apart from letting out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative, submitted that the assessee let out the commercial complex to various persons and receiving rental income. The assessee claimed in the earlier assessment year the entire rental income as income from business. The Assessing Officer, however, rejected the claim of the assessee and found that the entire rental income has to be assessed as income from house property. The decision of the Assessing Officer was confirmed by the Tribunal and the High Court for the assessment year 2001-02. The order of this Tribunal for assessment year 2001-02 was also further confirmed by the Madras High Court. Similarly, for assessment years 2004-05, 2005-06, 2007-08 and 2008-09, the Madras High Court confirmed the decision of this Tribunal, holding that the entire rental income has to be assessed as income from house property. For the assessment year 2003-04, this Tribunal, however, found that the assessee, apart from letting out the property and collecting rent, provides services such as general public refreshments, maintenance of waiting room, reading room, meeting room and other conveniences, internal security, maintenance of common area and lift operation. Therefore, by placing reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arises for consideration is with regard to classification of rental income received by the assessee from the commercial complex. For the assessment years 2001-02, 2004-05, 2005-06, 2007-08 and 2008-09, the issue travelled upto Madras High Court and the Madras High Court found that the entire rental income has to be assessed as income from house property. For the assessment year 2003-04, this Tribunal found that the activities carried on by the assessee were not considered by the authorities below, therefore, the matter was remitted back to the file of the Assessing Officer. The Assessing Officer, after examining the activities of the assessee, found that the rental income received by the assessee has to be assessed as income from house property. When the matter was appealed before the CIT(Appeals) by the assessee, the CIT(Appeals) found that the activities carried on by the assessee for maintenance of lift operation, providing security, maintenance of waiting hall, reading hall, etc. amount to service, therefore, part of the rent has to be classified as income from business. Accordingly, the CIT(Appeals) found that 25% of the rental income has to be treated as income from business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licable to the facts of the case. The law laid down by the Apex Court is binding on all the authorities including the Tribunal under Article 141 of the Constitution of India. Therefore, this Tribunal is expected to follow the judgment of Apex Court in Chennai Properties and Investments Ltd. (supra) rather than the judgment of Madras High Court in the assessee's own case for the assessment years 2001-02, 2004-05, 2005-06, 2007-08 and 2008-09. 10. We have considered the facts of the case in the light of the judgment of Apex Court in Chennai Properties and Investments Ltd. (supra). It is not in dispute that apart from letting out the property, the assessee is maintaining common area, lift operation, providing security, maintenance of waiting hall, meeting hall, etc. These activities are carried on in a systematic and regular manner. Therefore, the service provided by the assessee in a systematic and regular manner would amount to business activity. The rental agreement entered into by the assessee does not bifurcate the rent for the services provided and letting out the property. However, for the assessment year 2003-04, the assessee appears to have claimed before the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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