TMI Blog2017 (7) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... has correctly considered the nature of the business activities of the Assessee Company, as well as, terms and conditions of the relevant agreements, under which the commercial space in the mall was given on hire by the Assessee Companies to the concerned parties. It also considered the various services provided by the Assessing Companies during the course of operation and running of the Family Entertainment Centre-cum-malls. Commissioner (Appeals) and the Tribunal have concurrently arrived at a conclusion that the intention of the Assessing Companies was to commercially exploit the property by way of complex commercial activities and it was not a case of letting out the property simplicitor. The rental income and the service charges thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment of the demerged Companies. The Assessing Officer was entitled to consider the issue afresh. The learned counsel submits that the principle of res judicata would not apply to these proceedings. The learned counsel further submits that the Assessee Company was the owner of the property and the income received from the property leased out to various parties are to be assessed as house properties. To substantiate his contention, the learned counsel relies on the Judgment of the Apex Court in the case of Sultan Brothers Pvt. Ltd. Bombay v. Commissioner of Income Tax, Bombay City II, Bombay reported in (1964)5 SCR 807, so also on the another Judgment of the Apex Court in Shambhu Investment (P) Ltd. v. Commissioner of Income Tax repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of the Respondent/Assessee by way of rent was assessed as 'business income'. One Company namely ECity Entertainment has demerged and its properties are divided between the present Respondent Companies from which also the income is by way of rent. In respect of ECity Entertainment also for the earlier years, prior to its demerger, the income from rent was assessed as 'business income'. The learned counsel further submits that even in the present Appeals, the Appellant has not, in any manner, objected to the observations of the Tribunal being incorrect. It is also accepted in the Appeals, more particularly in paragraph 5.1, that the Respondent is primarily engaged in the business of leasing and rentals of property and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. It is not disputed that ECity Entertainment was assessed till the Assessment Year 2005-06 and the income derived by the said Company by way of rent was always assessed as 'business income'. 10 There is no dispute with the proposition that the principle of res judicata would not apply, however principle of consistency has to be considered. 11 Even in a case of Sultan Brothers (referred to supra), the Apex Court has observed that a small entry in the object clause showing a particular object would not be a determinative factor to arrive at a conclusion, whether the income is to be treated as 'income from business' and as such a question would depend upon the circumstances of each case i.e. whether particular busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or substantive income was from letting out of the property, which was the principal business activity of the Assessee. 14 In the present case, the facts are otherwise. The substantive income of the Assessee is from leasing out the shop/stalls. 15 The Tribunal in its Judgment, while appreciating the facts, has observed that the various malls are built by Assessee and are operated from the year 2001. The operational income received from the said activity, in the form of rent, and other service charges was consistently offered to tax as its business income in the earlier years and the same was accepted by the Department as a business income. After demerger, both the Assessee Companies took over the assets and liabilities of the demerged ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
