TMI Blog2019 (11) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed. - ITA No.135/Ahd/2018 - - - Dated:- 21-11-2019 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member For the Assessee : Shri Tushar P. Hemani, AR For the Revenue : Smt.Apporna Agarwal,CIT-DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-2, Ahmedabad dated 4.12.2017 passed for the Asstt.Year 2013-14. 2. Assessee has raised six grounds in the appeal, out of which ground no.3 to 6 are not pressed for adjudication. They are accordingly dismissed for want of prosecution. 3. Remaining grounds for adjudication i.e ground no.1 and 2 of the appeal reads as under: 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming that income of ₹ 9,04,49,999/- is taxable under the head Income from House Property as against under the head Income from Business and Profession offered in the return of income of the appellant. 2. On the facts and in the circumstances of the case the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The assessee has to perform contractual obligations such as providing various facilities, amenities and services to the licensee/visitors. It is further pleaded that these activities require continuous management, monitoring and attention and for the same the assessee has employed number of personnel on permanent basis, and therefore, management and administration of the shopping mall is the sole responsibility of the assessee. The assessee is carrying out systematic business activities as a one-unit, which are inseparable. The rental income is part and parcel of the business activities of the assessee-company. It is reiterated that the intention of the assessee is to commercially exploit the property by way of complex commercial activities and it is not a case of let out the property simplicitor. The rental income and the service charges thus are received by the assessee as business income during the course of business carried out by them of operating and running mall as a commercial activity. In its submissions, the assessee has relied on various judgments to support the case of the assessee that since the intention of the assessee was to exploit the property commercially, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e services offered by mall to, and for, those occupying the business premises on such mall. Once the Assessing Officer himself comes to the conclusion that given the complexity of these services and all these facts being taken as integrated wholly the income in question is to be taxed as business income, it would not at all appropriate for the Assessing Officer to deviate from such a stand, without any material change in the facts and circumstances in a subsequent year. In any event, the maintenance charge for common area maintenance is only one of the segments of services provided to the unit holders in the mall. The common area maintenance is one aspect where costs are shared but that does not mean that all other services and amenities essential to smooth functioning and conducive to business, can be ignored for the purpose of ascertaining the nature of business model. It, therefore, cannot be said, on the facts and circumstances that all the services which have been provided to the unit holders have been separately taxed as business income. The fact remains that even though common area maintenance services are charged for certain services, there are larger num ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not a case of letting out the property simplicitor. The rental income and the service charges thus were received by the Assessee Company as business income during the course of business carried out by them of operating and running a Mall as a commercial activity. The facts of the present case are much similar to the case of Chennai Properties and Investments Ltd. (referred to supra). 16. We find that the appreciation of evidence by the Commissioner (Appeals) and Tribunal is not perverse and the finding arrived at by them is plausible one. 8. Specifically dealing with a materially similar question, the Hon ble Kerala High Court in the case of CIT vs. Oberon Edifices Estates (P) Ltd, reported in [2019] 103 taxmann.com 413 (Kerala), have, inter alia, observed as follows:- 27. In the instant case, it is not a letting out of property simpliciter, without anything more. A host of services are being provided by the assessee at the shopping mall. The assessee is engaged in a complex set of activities at the shopping mall. Management of the shopping mall is done by the assessee. The basic purpose is commercial exploitation of the property. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue has been decided by us in favour of the assessee, all other issues are rendered academic and infructuous. The appeal of the assessee is thus allowed. The ld.DR has not pointed out any fundamental changes in the facts of this year with that of earlier years, so as to prompt to us to take a different view. Rather, both the Revenue authorities gone to record a finding that there is no change in the facts and to maintain consistency with the earlier years, income of the assessee is to be treated as income from house property. Since identical issue was dealt with by the Tribunal in earlier years, as cited (supra) in the assessee s own cases, following the principle of consistency, we direct the AO to treat the impugned income earned by the assessee under profit and gains from business or profession . 7. In ground no.2, the assessee is aggrieved by the action of the Revenue in restricting the deduction towards interest on borrowed funds and not allowing the same to be set off against the income from business. In the foregoing paragraph, we have held that income earned by the assessee is to be treated under the head profits and gains from busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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