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TMI Blog2017 (11) TMI 862X X X X Extracts X X X X X X X X Extracts X X X X ..... any reason to deviate from the findings recorded by the Ld. CIT(A) on this issue. - Decided in favour of assessee. - ITA no.1316/Mum./2015 - - - Dated:- 13-11-2017 - SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Prateek Jain Ms. Nehan Anchalia AR s For The Revenue : Shri Suman Kumar-Sr. AR ORDER PER: PAWAN SINGH This appeal by the Revenue u/s 253 of Income-tax Act is directed against the order of Ld. CIT(A)-17, Mumbai, dated 08.03.2015 for the Assessment Year-2010-11. The Revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding the rental receipts as Business Receipts without considering that the assessee has received the rent for allowing user of the property and not for carrying out any systematic activity which is the pre-condition for business. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in holding the rental receipts as Business Receipts without considering that the assessee was providing security system, cleaning and maintenance, lighting, repair and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent appeal are not covered in view of the decision of the Hon ble Supreme Court in Chennai Properties Investment Pvt. Ltd. 373 ITR 673 (SC). In rejoinder, argument of the ld. AR submitted that the decision of the Chennai Properties Investment Pvt. Ltd. (supra) was already considered by the coordinate Bench in para 9 of the order of the Tribunal for Assessment Year 2006-07 to 2009-10. 2.1. We have considered the submissions of the Ld. A.R of the assessee and perused the order of co-ordinate Bench of the Tribunal for A.Y. 2006-07 to 2009-10 in ITA nos. 1989, 1990 1991/Mum/2013 dated 23.09.2015 in assessee s its own case. The coordinate bench of the Tribunal has passed the following order:- 6. We have heard the rival contentions and have also gone through the records. We find that the Ld. CIT(A) has discussed in detail the nature of activities of the assessee and thereafter has examined the facts of the case of the assessee in the light of the various judicial decisions of the higher authorities as reproduced above. He has rightly observed that it was not a simple case of letting out of the property. The premises in question was specially designed to be operated as a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing structure and to develop and maintain the same as markets or other buildings, residential and commercial or convinces, drainage facility, electric, telephonic, television installations and to deal with the same in any manner whatsoever, to construct, erect, build, let out building structures, high tech parks, houses, apartments, hospitals etc. It is also mentioned in the main objects of the company to carry on the business of the builder to develop the properties by construction of multistoried commercial complex and to grant the same on lease or license or to sale or otherwise dispose of the properties so constructed and also to manage and maintain the properties so constructed. When as per the memorandum of association of the company the main object of the company was to to purchase and acquire and develop the property and to give the same on lease or license basis along with complex commercial activities then the company was justified in declaring its income from such property as business income. The intention of the assessee was to commercially exploit the property by way of complex activities as per its main objects. The otherwise undisputed facts of the case are tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.2692/M/2010. He has further invited our attention to the balance sheet of the assessee to show that the assessee had borrowed huge funds for the construction and development of the commercial complex which activity was not like that of an ordinary owner of the property who lets out the same for earning rental income but the same was an organized, planned activity to construct the shopping mall, provide the infrastructure and related amenities and to exploit the same commercially. In an ordinary letting no one will borrow such a huge amount just to let out the property for earning rental income which generally does not give appropriate returns as compared to the investments. In this case, the assessee had taken huge risk of borrowings and loss which was tempted by the expectations of high returns and the same cannot be said to be ordinary letting of the house property. The activity of construction of multiplex 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. 8. The Hon'ble Supreme Court in the case of Karnani Properties Ltd. v. CIT [1971] 82 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquire 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 from letting out of those properties. The Hon ble Supreme Court while relying upon its the various other decisions held that in such a case the irresistible conclusion would be that the letting of the properties was in fact the business of the assessee and the income arising therefrom was to be treated under the head Income from Business and that it cannot be treated as income from House Property. What the Hon ble Supreme Court emphasized upon was that the holding the aforesaid properties and earning income by letting out those properties was the main objective of the company. The facts of the case of the assessee before us are on better footings. The assessee 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 cente ..... X X X X Extracts X X X X X X X X Extracts X X X X
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