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TMI Blog2022 (5) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... the properties. Therefore, there is no doubt that assessee has object of renting out of the properties as per its object in Memorandum of Association. Honourable Bombay High court in principal commissioner of income tax v. City centre mall nashik pvt. Ltd.[ 2020 (1) TMI 872 - BOMBAY HIGH COURT] has also held that when main objects of assessee, over and above real estate development as main clause has renting of property there in and assessee is also providing certain other services as mentioned in Annexure B of leave and License agreement, income derived is to be taxed as Business Income and not income from house property. Also see M/S CHENNAI PROPERTIES INVESTMENTS LTD VERSUS THE COMMISSIONER OF INCOME TAX [ 2015 (5) TMI 46 - SUPREME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenses of Rs. 4,64,59,634/- be allowed. 2. The brief fact of the case shows that assessee is a company engaged in the business of building and developing properties. It filed its return of income on 29th September 2013 at a loss of Rs. 3,12,35,068. The case was selected for scrutiny. 3. During the course of assessment proceedings the learned Assessing Officer found that was executed a Leave and License Agreement on 9th September, 2011 between M/s. Sankalpan Infrastructure Pvt. Ltd. (Licensor) and M/s. Lanxess India Pvt. Ltd. for Lanxess house situated at Thane. As per that deed, Sankalpan Infrastructure Pvt. Ltd. (Licensor) granted license to Lanxess India Pvt. Ltd. (Licensee) from 1st January 2012, to 31st December 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation of the action of the Assessing Officer was that the above income subjected to TDS under section 194(I) of the Act, wherein licensee has categorized the same as rental income. The learned CIT(A) rejected the contention of the assessee that memorandum of association of the company cannot alter the character of income. The assessee is aggrieved with that and has preferred the appeal before us. 6. The learned Authorized Representative vehemently submitted that the assessee is engaged in the business of real estate development. It has purchased one property which was at the time of purchase was earning rental income. Assessee's memorandum of association clearly shows that the assessee is a developer and builder and according to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income and not the income from house property. 7. The learned Departmental Representative vehemently supported the order of the lower authorities. It was submitted that:- i. TDS was deducted on above sum under section 194I of the Act. ii. Assessee is engaged in business of real estate development and renting may be one of the objects but it is not the only object. iii. Decisions relied upon by assessee do not apply to facts of the case. iv. Intention of assessee is to earn rental income only. 8. We have carefully considered the rival contentions and perused the order of the lower authorities. The fact clearly shows that assessee is a company engaged in the business of real estate development. According to Memoran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d above real estate development as main clause has renting of property there in and assessee is also providing certain other services as mentioned in Annexure B of leave and License agreement, income derived is to be taxed as Business Income and not income from house property. Therefore looking at the facts of the case and the decision of honorable Supreme Court and Honorable Bombay High court, we hold that income from property earned by the assessee amounting to Rs. 3,38,46,924 is chargeable to tax as business income and not as income from house property. Accordingly, we direct the learned Assessing Officer to tax the above income under the head of business income. Accordingly, grounds no. 1 and 2 of the appeal are allowed. 9. In the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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