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TMI Blog2021 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s case, the learned CIT(A) erred in confirming that income of Rs. 7,93,93,398/- 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 Appellant's case, the learned CIT(A) erred in not allowing deduction in respect of various expenditure incurred during the year against common area maintenance income and space selling income tax as income from business and profession." 3. The fact in brief is that return of income declaring total loss of Rs. (-)2,35,58,479/- was filed on 30th Sep, 2015. The case was subject to scrutiny assessment and notice u/s. 143(2) of the Act was issued on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al activity. The Assessing Officer has not accepted the detailed submission and supporting material furnished by the assessee and after referring the earlier assessment year in order to make consistency stated that income earned by the assessee from various let out properties was treated as income from house property instead of business income. 4. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee. 5. During the course of appellate proceedings before us, the ld. counsel has submitted that identical issue on similar fact has been adjudicated in favour of the assessee by the Co-ordinate Bench of the ITAT for assessment year 2010-11 to 2011-12 vide ITA No. 3559 & 3560/Ahd/2015 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 discussion made by the Tribunal while allowing the claim of the assessee reads as under: "7. We have noted that in assessee's own case for the assessment year 2009-10, the Assessing Officer himself has accepted the treatment of income in question as 'profits and gains from business or profession'. No doubt the principles of res judicata do not apply to the income-tax proceedings, but where a fundamental aspect permeating through different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 number of services such as round-the-clock security, electrification, cleanliness, parking services and most of other services which 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation and running of the Family Entertainment Centre-cum-malls. On appreciation of facts, the 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 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 eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 from business and not as income from house property. 28. On the basis of the discussion above, we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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