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2008 (5) TMI 293 - AT - Income TaxNature of income - Business Centre Service charges - treated as “Business Income” or “Income from house Property” or 'Income from other sources' - HELD THAT:- We find that the facts of the present case are different from the facts before the Hon'ble Supreme Court in the case of Shambhu Investment (P) Ltd. [2003 (1) TMI 99 - SC ORDER]. In the case before the Hon'ble Supreme Court, the assessee had let out the furnished accommodation without any other facilities. However, in the present case. various facilities are provided as noted by the CIT(A) as well as by us in this order such as. receptionist and a telephone operator to attend the customers and their telephone calls, use of common waiting/guest room with attached toilets etc., for use of the customers and guests of the customers. use of central air-conditioning, services of attendants, sweeper, etc., use of telephone and fax machine and furniture, etc. Further, ultimate control over the premises is with the assessee. Further, there is no intention of mere letting out the property and earn the rental income since customers keep on changing from time-to-time. The space is provided to the customers on weekly/monthly basis for carrying out their work of assignment or for completing the specific work. Sometimes, there may be no customer and space may remain vacant. In such cases, the activity is to run business centre as a commercial activity like hotels and hospitals and use of the property is incidental to carrying on such business activity. Sec. 22 of the Act specifically excludes those cases where property is used for business purposes. Therefore, we are of the view that the object of the assessee is to run the business centre by exploiting the property and not mere letting out the property. Consequently, the receipts from such activity must be considered as business receipts. Accordingly, we hold so. The view taken by us is fortified by the decision of Hon'ble Gujarat High Court in the case of Asstt. CIT vs. Saptarshi Services Ltd. [2003 (2) TMI 415 - GUJARAT HIGH COURT]. Therefore, the order of the CIT(A) is set aside and consequently, the AO is directed to compute the income under the head "Profits and gains from business or profession". Appeal of the assessee is allowed.
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