TMI Blog2008 (4) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... carried on by the assessee. Mere statement of the assessee that it was running a business centre is not enough. No facility or services were provided by the assessee. It is mere case of letting out of furnished accommodation on long-term basis. In case of business centre, the purpose is to provide space to business people on short-term basis for holding conferences, exhibitions, etc., which is missing in the present case. The case of the assessee is akin to the case before the Apex Court in the case of Shambhu Investment (P.) Ltd. [ 2003 (1) TMI 99 - SC ORDER] and, therefore, income from letting out was rightly assessed as income from house property . The order of the CIT(A) is, therefore, upheld. In the result, the appeal is dismissed. - K.C. SINGHAL AND B. RAMAKOTAIAH, JJ. S.J. Mehta for the Appellant. S. Srivastava for the Respondent. ORDER K.C. Singhal, Judicial Member. - Though various grounds have been raised by the assessee but the effective ground is one i.e., whether charges received by the assessee from different parties on account of user of the property owned by the assessee are assessable under the head Income from house property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse property and consequently, determined the income from house property at Rs. 5,23,226. The other income was dividend income of Rs. 1,168 only which was exempt under section 10(33) of the Act. On appeal, the CIT(A) noted that in assessment years 1997-98 and 1998-99, the Tribunal had decided the issue in favour of the assessee by holding that income was in the nature of business income. However, he held that income was assessable under the head Income from house property in view of the latest judgment of Hon ble Supreme Court in the case of Shambhu Investment (P.) Ltd. v. CIT [2003] 263 ITR 143 . Aggrieved by the same, the assessee is in appeal before the Tribunal. 3. The learned counsel for the assessee vehemently assailed the orders of the CIT(A) by submitting - ( i ) that after the closure of earlier business carried on by the assessee, it was decided that the office premises should be exploited by way of running a business centre. Our attention was invited to the resolution passed by the Board of Directors on 15-12-1993 wherein it was resolved that its premises be made available along with facilities including telephone, etc., for office use on such terms and condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the main intention of the assessee which has to be seen to ascertain whether the property was let out or it was exploited by way of complex commercial activities. According to him, the case of the assessee is that of exploitation of the immovable property in commercial sense and therefore, the income received by the assessee should be assessed as business income. 6. After considering the rival submissions of the parties, we don t find merit in the appeal of the assessee on this issue since, in our opinion, the controversy between the parties is covered by the decision of the Apex Court in the case of Shambhu Investment (P.) Ltd. ( supra ). The facts of the present case are similar to the facts of the case before the Apex Court. In that case, the following facts were noted by the Apex Court. "Shambhu Investment (P.) Limited, the assessee above named, is the owner of a building at Raheja Chambers, Nariman Point, Mumbai. The said premises have been furnished by the assessee and have been let out to various persons and/or firms and/or organisations with all furniture, fixtures, light, airconditioners for being used as table space . The said assessee under the agreement w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upied by the same parties as is also clear from the chart given in para 2. Therefore, facts of the present case are the same as facts in the case of Shambhu Investment (P.) Ltd. ( supra ) and therefore, the said judgment squarely applies to the present case. 8. The learned counsel for the assessee has submitted before us that it was exploiting the immovable property for running business centre and therefore, the Supreme Court judgment would not apply. In our view this submission of assessee s counsel cannot be accepted. A property can be said to be run as a business centre, when it is equipped with various facilities and the space is given to general public for a specified purpose for a short duration. The entire activity is run like a business. For example, running a hotel business where various rooms are offered to general public for a short period along with various facilities. Similarly in case of a hospital, space is offered to patients during the period of illness. Similarly, a property may be converted into banquet hall which is given for marriage parties. Similarly in a business centre, the space is provided against charges for holding of conferences, exhibition, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is to let out the property or any portion thereof the income must be considered as rental income or income from property whereas if the primary object is to exploit the immovable property by way of complex commercial activities in that event it must be held as business income." According to him, the above observations make it clear that where property is exploited by way of complex commercial activities, income would be considered as business income. We have no dispute with such legal position but the assessee has failed to prove that complex commercial activities were carried out by the assessee. Renting of furnished accommodation does not involve complex activity as held by the Hon ble Calcutta High Court in the case of Shambhu Investment (P.) Ltd. ( supra ), approved by the Apex Court. Therefore, the earlier decision of the Tribunal in assessee s own case being in conflict with the above Supreme Court judgment cannot be followed. 12. The decision of Hon ble Gujarat High Court in the case of Saptarshi Services Ltd. ( supra ) heavily relied upon by assessee s counsel is distinguishable on facts. In that case, one K had leasehold rights over a land on which part co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Apex Court in the case of Karnani Properties Ltd. ( supra ) relied on by the assessee s counsel does not help the case of the assessee. In that case, the assessee apart from letting out the property to various tenants, also provided certain facilities and declared the entire receipts under the head Profits and gains from business or profession . The Assessing Officer split the receipts in two parts - one part was attributed to rental income while the other part was attributed to services. The later part was assessed as income from other sources . On appeal, the rental income assessed by Assessing Officer was not in dispute. The controversy was restricted to other receipts - whether to be assessed as income from other sources or as business income. The AAC held that other part was also assessable as rental income. On further appeal, the Tribunal held that later part of receipts were business receipts. Finally, the Apex Court held the same to be business receipts. That judgment cannot be applied to the present case as rental income from property was not in dispute. In the present case, the entire receipts were composite receipts on account of letting out of furnished acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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