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2016 (2) TMI 82 - ITAT MUMBAITreatment of property lease income as income under the head “Profits and Gains of Business or Profession” - Held that:- The entire dispute has to be considered in the light of the decision of the Hon’ble Supreme Court in the case of Chennai Properties & Investments Ltd Vs CIT [2015 (5) TMI 46 - SUPREME COURT] wherein held that letting out of the properties being the business of the assessee, the income from which has to be treated as income from business. The Hon’ble Supreme Court has further observed that the Memorandum of association of the assessee company clearly mentions that main objects is to acquire and hold the properties and holding the aforesaid properties and earning income by letting out those properties is the main objective of the company. Therefore, any income earned has to be taxed under the head ‘Income from ‘business’. In the present case also we find that in A.Y. 2008-09, the AO himself has accepted the nature of business of the assessee as “Operation of Mall’ therefore any income earned by the assessee by the operation of mall has to be taxed under the head Profits & Gains of Business or Profession. The main object of the company as per the Memorandum of Association also refers to such activities as the main object for which the company is incorporated. As the main object itself shows that the assessee-company has been incorporated for running shopping malls /departmental stores, super markets, shopping arcades, shopping outlets, entertainment, recreation and amusement centre therefore any income earned from such activities has to be taxed under the head profits and gains of business.The assessee is entitled for the claim of depreciation and also brokerage expenses. The AO is directed to allow the same - Decided in favour of assessee Addition on account of notional lease rental income - Held that:- As relying on Reliance Industrial Infrastructure [2009 (1) TMI 4 - BOMBAY HIGH COURT ] we direct the AO to exclude the notional lease rental income from the total income of the assessee - Decided in favour of assessee. Disallowance of interest (a) for giving interest free advances (b) for earning exempt income - Held that:- A perusal of the factual matrix elsewhere shows that the assessee was having sufficient own funds for making the investments and for giving interest free advances. The facts of the case are squarely covered by the decision of the Hon’ble High Court of Bombay in the case of Reliance Utilities and Power Ltd(supra) followed by the Hon’ble High Court of Bombay in the case of CIT Vs HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT]. . Respectfully following the same, we direct the AO to delete the impugned disallowances made on account of interest expenditure. - Decided in favour of assessee
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