Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (6) TMI 771 - AT - Income TaxIncome from Letting out of Studio - Complex Commercial Activities - Profits and Gains of Business or Profession or Income from House Property? - Assessee lets out the property on hourly basis for use as shooting location - AO considered income derived as income as Income From House Property by following the decision of SULTAN BROTHERS PRIVATE LIMITED VERSUS COMMISSIONER OF INCOME-TAX, BOMBAY CITY II [1963 (12) TMI 4 - SUPREME COURT] HELD THAT:- We find that in SHAMBHU INVESTMENT P. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2003 (1) TMI 99 - SC ORDER], which is approved by Hon’ble Supreme Court, it was held that "merely because income is attached to any immovable property cannot be the sole factor for assessment of such income as income from property; what has to be seen is what was the primary object of the assessee while exploiting the property. If it is found, applying such test, that main intention is for letting out the property, or any part thereof, the same must be considered as rental income or income from property. In case, it is found that the main intention is to exploit the immovable property by way of complex commercial activities, in that event, it must be held as business income." It is thus clear that when a property is exploited by way of “complex commercial activities”, income so earned by exploiting the property is to be taxed as business income. Viewed in this perspective, and having regard to the fact that it is not a case of significant value addition to premises by providing all incidental and support services to facilitate cine shooting and related activities, the income is earned by complex commercial activities which can only be taxed under the head business income. The fact that it is clearly a commercial adventure, involving marketing and promotions as also appropriate improvisations on a case to cases basis, takes these receipts out of the ambit of income under the head property income. Hon’ble Calcutta High Court’s judgment in the case of Shambhu Investments Ltd., has duly taken into account Hon’ble Supreme Court’s judgment in the case of Sultan Brothers and yet reached the conclusion that where complex commercial activities are involved in exploiting a property, income can only be taxed as business income. Also, hon'ble Supreme court's case upon which AO relied have different facts from the present case, thus have no relevence in present context. The conclusions arrived at by the Ld. CIT (A) i.e such income comes under the head PGBP, thus do no call for any interferene - Decision in favour of Assesee.
|