TMI Blog2021 (9) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... eration - HELD THAT:- As we have held that income earned by the assessee is to be treated under the head profits and gains from business or profession , as a consequence thereof, this expenditure is also to be considered from that angle. Accordingly, this ground is allowed. - ITA No.226/Ahd/2019 - - - Dated:- 8-9-2021 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member For the Assessee : Shri Biren Shah, AR For the Revenue : Shri Vinod Tanwani, CIT-DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-11, Ahmedabad dated 5.12.2018 passed for the Asstt.Year 2014-15. 2. Assessee has raised two grounds of appeal. We take ground no.1 first for adjudication. It reads as under: On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming income of ₹ 9,58,97,427/- towards Mall Operating Revenue as taxable under the head Income from House Property as against Income from Business and Profession offered by Appellant in the return of income. 3. Brief facts of the case of the assessee are that the assessee is e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e leasing, are business revenue, and therefore fall under the head business income. The ld.AO did not accept the explanation of the assessee, and based on the decision of earlier assessment years, he held that in order to maintain consistency with the earlier years, the income from let out properties is to be treated as income from house property. Appeal before the ld.CIT(A) did not yield any success. Hence, the assessee is now before the Tribunal. 4. Before us, the ld.counsel for the assessee filed written synopsis which is running over 25 pages. The same is placed on record. The submissions made therein are more or less on similar line of arguments taken before the Revenue authorities. In its submissions, the assessee has also relied on various judgments to support the case of the assessee that since the intention of the assessee was to exploit the property commercially, the income received for letting out of the property was to be assessed under the head business income . The ld.counsel for the assessee also drawn to our attention that in earlier years similar claim was made by the assessee. The issue went upto the Tribunal, and the Tribunal has taken a consistent view on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. This is so held by the Hon ble Supreme Court in the case of Radhasoami Satsang v. CIT [1992] 193 ITR 321 (SC). In this perspective, when we approach the facts of the present case, we find that whether the income in question is to be treated as income from house property or income from business or profession is a question which must depend on the appreciation of complex web of facts pertaining to the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Company and continued the same business of operating and running the malls. The Tribunal has 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion above, we find that the amount received by the assessee company on letting out the shop rooms in the mall constructed by it has to be treated as business income and it has to be assessed to tax under the head profits and gains of business and not under the head income from house property . The substantial question of law is answered in favour of the assessee and against the revenue. 9. In view of the above discussions, as also bearing in mind entirety of the case, we are of the considered view that the authorities below were indeed in error in treating the consideration received by the assessee for commercial space given in the mall to various persons as income from house property. We vacate the action of the authorities below and direct that the said income be treated as profits and gains from business or profession. As this core 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. As mentioned above, the ld.DR has not pointed out any fundamental changes in the facts of this year with that of earlier years, prompting us to take a different view. Rather, both ..... X X X X Extracts X X X X X X X X Extracts X X X X
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