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TMI Blog2023 (7) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... as 'income from house property'. CIT(A) has not erred in facts and in law in holding that the aforesaid income qualifies as business income of the assessee. Decided against revenue. - ITA No. 399/Ahd/2022 - - - Dated:- 16-6-2023 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : Shri Tushar Hemani, Sr. A.R. And Shri Parimalsinh B. Parmar, A.R. For the Revenue : Shri M. Anand Kumar, Sr. D.R. ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This is an appeal filed by the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad, in proceeding u/s. 250 vide order dated 17/08/2022 passed for the assessment year 2018-19. 2. The Department has taken the following grounds of appeal:- 1 Whether on the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in holding that the income earned by the assessee under the head income from House-'Property was required to be taxed under the head Profits and Gains from the Business or Profession as claimed by the assessee and thereby directed to delete the addition of Rs. 95,41,923/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in A.Y.2015-16 in ITA No. 1718/Ahd/2018. The relevant para of the findings of the Hon'ble ITAT in A.Y. 2015-16 is reproduced as under:- 6. Heard both the sides and perused the material on record. The assesses is engaged in the business of developing and maintaining properties and mall. During the year under consideration, the Assessing Officer has treated the income from let out of various properties in mall under the head house property as done in earlier year in order to maintain consistency. With the assistance of Ld. Representatives, we have gone through the decision of Co-ordinate Bench of the ITAT for Assessment Year 2010-11 to 2013-14 and noticed that similar issue on identical facts has been decided in favour of assesses vide ITA No, 3359/Ahd/2015, ITA No. 3560/Ahd/2015 and ITA No. 135/Ahd/2018. The discussion made by the Tribunal while allowing the claim of the assesses for assessment year 2013-14 vide ITA No. 135/Ahd/2018 is reproduced as under: 6. We have considered rival submissions and gone through the record carefully. We have also gone through order of the Tribunal in the assessee's own case for the assessment year 2010-11 and 2011-12. We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that all the services which have been provided to the unit holders have been separately taxed, as business income. The fact remains that even though' common area maintenance services are charged for certain services, there are larger number of services such as round-the-clock security, electrification, cleanliness, parking services and most of other services which are integrated and essential for successful operation of mall, consideration for which is included in the charges received from unit holders. The fact that these unit holders treat these charges as rent simpliciter and tax deducted at source under section 194-1 cannot determine the question of taxability in the hands of the recipient. In the business model embedded by the operation of the shopping mall, as we have / pointed out earlier, a complex web of integrated services are to be provided and the consideration received from those occupying the business premises is not simply as such rent for the premises. As we hold so, we find support from Hon'ble Supreme Court's judgment in the case of CIT vs. E City Real Estate (P.) Ltd., [2018] 100 taxmann.com 94 (SC), wherein Their Lordships has, inter alia, observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is engaged in a' complex set out activities at the shopping mall. Management of the shopping mall is done by the assessee. The basic purpose is commercial exploitation of the property. The assessee has earned the income not merely by letting out the shop rooms but also by providing amenities and facilities at the shopping mall. Such amenities and facilities are not the basic facilities required for occupation of a shop room by a tenant. They are the special facilities for running the shopping mall and are meant to attract the customers and provide them the comfort and convenience of shopping. In cases where the income received is not from the bare letting out the property but on account of the facilities and services rendered, the operations involved in such letting out is in the nature of business and the income derived therefrom has to be treated as business income and not income from property. The income derived by the assessee cannot be regarded as simply from the exercise of property right. Where the assessee company has developed the shopping mall and let out the same by providing a variety of services, facilities and amenities in the mall, it can be found t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee under the head profit and gain from business or profession. Accordingly, this appeal of the assessee is allowed. 8.3 As there is no change in facts during the year under consideration, therefore, following the findings of the Hon'ble ITAT, Ahmedabad referred supra in appellant's own case wherein similar issue has been consistently allowed in favour of appellant, it is held that income derived by the appellant on letting out of various units/ shops etc. in the Mali has been rightly offered as 'income from business and profession'. Therefore, the AO is directed to compute rent income under the head Income from business profession as claiming return of income. Further, the AO is also directed to delete the disallowance of depreciation amounting to Rs. 1.44.62,541/- . Thus, grounds of appeal no. 2, 3 4 are allowed. 5. The Department is in appeal before us against the aforesaid order passed by ld. CIT(A) holding that income from letting of space in mall qualifies as business income of the assessee. The ld. Departmental Representative submitted that the Department is in appeal before the Gujarat High Court against the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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