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TMI Blog2019 (11) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... in rejecting the relevant ground No.3 raised by the appellant before him to the effect that Ld. A.O. erred in restricting the deduction towards interest on borrowed fund to Res. 6,33,14,999/-. The assessee has incurred interest expenditure of Rs. 6,77,22,853/- being interest on borrowed fund which were utilized for constructing the house property and acquiring the Plants & Machinery and equipment wherefrom income was derived. The A.O. ought to have allowed the deduction towards the interest expense of Rs. 6,77,22,853/- in computation of total income.: 4. Brief facts of the case are that the assessee-company is engaged in the business of constructing, developing fully equipped retail malls, shopping complexes etc. The assessee is also operating and running a fully equipped retail mall known as "Gulmohar Park". It has filed return of income on 30.9.2013 declaring total income at Rs.NIL. The case of the assessee was selected for scrutiny assessment and notice under section 143(2)was issued and served upon the assessee. During the assessment proceedings, the ld.AO noticed that the assessee has earned income from various let out properties, which was treated by the assessee as busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head "business income". The ld.counsel for the assessee also drawn to our attention that in earlier years also similar claim was made by the assessee. The issue went upto the Tribunal, and the Tribunal in ITA Nos.3559 & 3560/Ahd/2015 allowed the claim of the assessee and directed the AO to treat the income received by the assessee by letting out of the property as income from business. In this year also, facts are identical, and therefore, claim of the assessee for A.Y year 2013-14 be allowed. He placed on record copy of the order of the Tribunal dated 27.8.2019. On the other hand, the ld.DR supported orders of the Revenue authorities. 6. We have considered rival submissions and gone through the record carefully. We have also gone through order of the Tribunal in the assessee's own case for the assessment year 2010-11 and 2011-12. We find that issues raised in this year are similar to assessment year 2010-11 and 2011-12. Before us, this is not a vexed issue, because the assessee is continuously claiming the same claim right from the Asstt.Year 2009-10, and the Tribunal has also upheld the treatment of income earned by the assessee under the income from business or profession. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are integrated and essential for successful operation of mall, consideration for which is included in the charges received from unit holders. The fact that these unit holders treat these charges as rent simpliciter and tax deducted at source under section 194-I cannot determine the question of taxability in the hands of the recipient. In the business model embedded by the operation of the shopping mall, as we have pointed out earlier, a complex web of integrated services are to be provided and the consideration received from those occupying the business premises is not simply as such rent for the premises. As we hold so, we find support from Hon'ble Supreme Court's judgment in the case of CIT vs. E City Real Estate (P.) Ltd., [2018] 100 taxmann.com 94 (SC), wherein Their Lordships has, inter alia, observed as follows:- "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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cupation of a shop room by a tenant. They are the special facilities for running the shopping mall and are meant to attract the customers and provide them the comfort and convenience of shopping. In cases where the income received is not from the bare letting out the property but on account of the facilities and services rendered, the operations involved in such letting out is in the nature of business and the income derived therefrom has to be treated as business income and not income from property. The income derived by the assessee cannot be regarded as simply from the exercise of property right. Where the assessee company has developed the shopping mall and let out the same by providing a variety of services, facilities and amenities in the mall, it can be found that the primary intention of the assessee was commercial exploitation of the property and where it has derived substantial part of its income by such activity, which constitutes its main business, the income so derived would be business income of the assessee. We, therefore, agree with the view of the Tribunal that the income derived by the assessee by letting out the shops in the mall has to be assessed as income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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