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2016 (4) TMI 1398 - AT - Income TaxCharacterization of income - nature of income - rental receipts of the assessee - business receipt or income from house property - HELD THAT:- For Asst. Year 2006-07 in assessee’s own case [2015 (10) TMI 2743 - ITAT MUMBAI] tribunal has confirmed the order of CIT(A) and considered the business centre service charges as business receipts - premises are in the control of the assessee and the assessee is required to provide services as per the agreement for which personnel on permanent basis were to be employed. Thus, the management and administration of the mall vested with the assessee. The detailed finding recorded by the CIT(A) has not been controverted by the department by bringing any positive material on record. Issue in favour of the assessee for holding that such commercial exploitation renders income from business rather than income from house property. - Decided against revenue. Disallowance of interest u/s. 36(1)(iii) - assessee has failed to substantiate the commercial expediency of giving interest free advances to the sister concerns out of its interest bearing borrowings - HELD THAT:- Assessee before us clearly stated that the assessee and its sister concerns are engaged in the business of real estate and this fact was argued before CIT(A) by assessee. He explained that the assessee has embarked upon setting up malls/business centre in a very big way in India . Developing and managing malls/shopping complexes is a very complex specialized business activity. It requires huge capital investment, manpower and, above all, expertise and knowledge in retail market and consumer behavior. The sister concerns of the assessee were in mall management and development business since many years due to which they had acquired relevant expertise and knowledge in the field of Mall Management Co. Ltd. As these concerns were already in mall business and the assessee had advanced amounts to these concerns as a part of its short term and long term strategy to expand its mall business, including construction of premises for the assessee in popular commercial centre for enabling the assessee to establish itself mall business. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the disallowance of interest - Decided against revenue.
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