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2014 (7) TMI 1171 - ITAT MUMBAIOperational income (rent) from running and operations “Family Entertainment Centre cum Mall” and service charges recovered - chargeable to tax in the hands of the assessee under the head “profits and gains of business or profession” as per assessee or under the head “income from house property” as held by the A.O. - Held that:- The facts of the present case as borne out from the record clearly shows that the cases of the assessees fall under the latter category as the intention of the assessees clearly was to exploit the commercial property by way of complex commercial activities and it was not a case of letting out the property owned by the assessee companies simpliciter. The rental income was not received by the assessee companies merely because of the ownership of the property but the same was received because of the complex commercial activity carried on by them of operating and running Malls which brought that rental income. The rental income and service charges thus were received by the assessee company as business income during the course of its business carried on by them of operating and running the Malls as a commercial activity and as rightly held by the ld. CIT(A), the said income primarily arising from the exploitation of commercial assets by way of complex commercial activity constituted the business income of the assessee company. It is observed that the decision of the co-ordinate bench of this Tribunal in the case of M/s Khandelwal Estate P. Ltd. (2014 (2) TMI 1227 - ITAT MUMBAI ) cited by the ld. Counsel for the assessee also supports the case of the assessees. In the said case, the income received by the assesse from the operation of shopping malls in the form of rent and service charges was held to be business income of the assessee by the Tribunal holding that giving space with services and facilities of varied and wide nature would definitely constitute a business and the relationship between the parties in such case is distinguished from that merely of a landlord and tenant relationship. We therefore find no infirmity in the impugned orders of the ld. CIT(A) treating the operational income received by the assessee companies from running of Malls in the form of rent and service charges as their business income and upholding the same on this issue, we dismiss these appeals filed by the Revenue. - Decided in favour of assessee.
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