ACIT (OSD) Corporate Circle 4(2), CHENNAI V. KKA Buildtech Private Limited, CHENNAI

ITA 1159/CHNY/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3794 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 22-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R SRICHARAN
• Keywords: Business income; Set aside
• Section: 13; 22; 27

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI , , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ ITA NO.1159/CHNY/2019 /ASSESSMENT YEAR: 2014-15 THE ASST . COMMISSIONER OF INCOME TAX(OSD), CORPORATE CIRCLE-4(2), CHENNAI. VS. M/S. KKA BUILDTECH PVT. LTD., NO. A-7 & 8, THIRU VI KA INDUSTRIAL ESTATE, GUINDY, CHENNAI 600 032. [PAN: AADCK 1427F] ( /APPELLANT) ( &'( /RESPONDENT) ( / APPELLANT BY : MR. SURESH PERIASAMY, JCIT &'( /RESPONDENT BY : MR. R. SRICHARAN, C.A /DATE OF HEARING : 28.07.2021 / DATE OF PRONOUNCEMENT : 08.10.2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-8, CHENNAI IN I.T.A NO.190 & 366/16-17 DATED 31.01.2017 RELEVANT TO THE ASSESSMENT YEAR 2014-15. I.T.A NO.1159/CHNY/2019 :- 2 -: 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. THE ORDER OF THE ID. CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD.CIT(A) ERRED IN HOLDING THAT RENTAL RECEI PTS SHOULD BE ASSESSED UNDER THE HEAD BUSINESS INCOME. 2.1 THE ID.CIT(A) ERRED IN DELETING THE ADDITION MA DE BY THE AO BY PLACING RELIANCE ON THE DECISION OF THE APEX COURT IN THE CASE OF CHENNAI PROPERTIES WITHOUT APPRECIATING THAT THE FA CTS OF ASSESSEE'S CASE IS DISTINGUISHABLE FROM THE SAID CASE. 2.2 THE ID.CIT(A) HAS FAILED TO OBSERVE THAT THE MO A OF THE ASSESSEE'S CASE IS CLEARLY DISTINGUISHABLE FROM THA T OF CHENNAI PROPERTIES MOA. 2.3 THE LD. CIT(A) ERRED IN NOT APPLYING THE RATION ALE OF THE DECISION OF THE APEX COURT IN THE CASE OF RAJ DADARKAR & ASS OCIATES VS. ACITJ2017] (394 ITR 592) (SC). 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E-COMPANY HAS CONSTRUCTED A COMMERCIAL PROPERTY ON KHADAR NAWAZ K HAN ROAD OF NUNGAMBAKKAM AREA AND HAS GIVEN SHOPS ON LEASE TO V ARIOUS PERSONS. THE ASSESSEE HAS ADMITTED THE LEASE INCOME RECEIVED BY THE ASSESSEE AS A BUSINESS INCOME. ACCORDING TO THE A. O, THE ASSESSEE HAS LET OUT ONLY SHOPS AND THE INCOME HAS TO BE OFF ERED UNDER THE INCOME FROM HOUSE PROPERTY BY OBSERVING AS UNDER: THE SUBMISSIONS OF THE ASSESEE WERE CAREFULLY PERU SED AND CAME TO THE OPINION THAT THE RENT RECEIVED IN THE CASE OF CHENN AI PROPERTIES AND INVESTMENT LTD., WAS HELD BY THE HON'BLE SUPREME CO URT THAT THE MOA WAS STATED 'TO ACQUIRE THE PROPERTIES IN THE CITY OF CH ENNAI (EARLIER NAMED AS MADRAS) AND TO LET OUT THOSE PROPERTIES'. HOWEVER THE MOA OF ASSESSEE STATE THE MAIN OBJECT W AS NOT VERY SPECIFIC TO RENTING OF IMMOVABLE IN THE CASE OF ASS ESSEE COMPANY. IT IS SLATED AS 'TO PURCHASE, OWN OR OTHERWISE ACQUIRE BY WAY OF MORTGAGE, LEASE, LICENSE IN INDIA OR ELSEWHERE, ANY RIGHT, TI TLE AND INTEREST IN REAL I.T.A NO.1159/CHNY/2019 :- 3 -: ESTATES OF ALL KINDS AND DEAL IN THE SAME BY SALE, LEASE, TRADE OR OTHERWISE ON SUCH TERMS AS MAY BE DEEMED FIT . AS COMPARE TO THE CHENNAI PROPERTIES MOA AND THE MO A OF THE ASSESSE COMPANY HAS DIFFERENT MODUS OPERANDI TO DO THE BUSINESS. AS PER THE INCOME TAX ACT, SECTION 22 PROVIDES THAT RENTAL INCOME FROM PROPERTY, BEING BUILDING OR LAND APPURTENANT T HERETO, OF WHICH THE TAXPAYER IS THE OWNER IS CHARGED TO TAX UNDER, THE HEAD 'INCOME FROM HOUSE PROPERTY'. IT WILL NOT MAKE ANY DIFFERENCE WHETHER THE PROPERT Y HELD BY THE OWNER AS STOCK IN TRADE OR OTHERWISE. THUS, IN RESP ECT OF PROPERTY HELD AS STOCK IN TRADE OR IN CASE OF A PERSON ENGAGED IN TH E BUSINESS OF BUYING AND SELLING OF PROPERTIES (AS MENTIONED IN THE MOA OF A SSESSEE), RENTAL INCOME FROM PROPERTY WILL BE CHARGED TO TAX UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY. HENCE, THE ASSESSES HAS EARNED INCOME FROM THE RENT ING OF SHOPS DEVELOPED BY IT WAX TO BE HELD TO BE TAXED UNDER IN COME FROM HOUSE PROPERTY. CONSIDERING THE FACTS OF THE CASE TN OUR CONSIDERAT E VIEW, RENTAL INCOME EARNED SHOULD BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND THE RECEIPTS FROM OTHER AMENITIES SHOU LD BE TAXED UNDER THE INCOME FROM OTHER SOURCE. ACCORDINGLY THE ASSESSMEN T IS COMPLETED AND THE RENTAL RECEIPTS FROM LETTING OUT OF THE SHOPS A RE COMPUTED AS UNDER. 4. ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTE D AS PER THE MEMORANDUM OF ASSOCIATION, THE MAIN OBJECT OF THE C OMPANY IS TO ACQUIRE AND HOLD THE PROPERTIES AND LET OUT THOSE P ROPERTIES IS THE BUSINESS OF THE ASSESSEE THEREFORE, THE LEASE RENTA L INCOME RECEIVED BY THE ASSESSEE HAS TO BE TREATED AS A BUSINESS INC OME AND HE ALSO RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT, CENTR AL-III, TAMIL NADU [2015] 373 ITR 673 (SC) AND SUBMITTED THAT THE ISSUE IS SQUARELY COVERED. THE LD. CIT(A) BY CONSIDERING THE SUBMISSI ONS OF THE ASSESSEE AND THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (SUPRA ) , HE HAS I.T.A NO.1159/CHNY/2019 :- 4 -: OBSERVED THAT THE ASSESSEE-COMPANY IS FULLY ENTITLE D TO SHOW ITS INCOME UNDER THE HEAD BUSINESS INCOME AND CLAIM CORRESPOND ING EXPENSES THEREON. THE ACTION OF THE A.O IN BRINGING THE INC OME FOR TAXATION UNDER THE HEAD HOUSE PROPERTY IS REJECTED AND THE I NCOME SHALL CONTINUE TO BE TAXED UNDER THE HEAD BUSINESS AS DEC LARED BY THE ASSESSEE. 5. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEF ORE THE TRIBUNAL. 6. THE LD. DEPARTMENTAL REPRESENTATIVE HAS SUBMITTE D THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (SUPRA ), WITHOUT CONSIDERING THE SUBSEQUENT JUDGMENT OF HON BLE SUPREME COURT IN THE CASE OF RAJ DADARKAR & ASSOCIATES VS. ACIT [2017] 394 ITR 592 (SC) AND STRONGLY SUPPORTED THE ORDER PASSED BY THE A.O. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE-COMPANY INCORPORATED IN AUGUST, 2007, UNDER THE PROVISIONS OF COMPANIES ACT, 1956 WITH IT S FIRST OBJECT BEING TO PURCHASE, OWN OR OTHERWISE ACQUIRE BY WAY OF MOR TGAGE, LEASE, LICENSE IN INDIA OR ELSEWHERE, ANY RIGHT, TITLE AND INTEREST IN REAL ESTATES OF ALL KINDS AND DEAL IN THE SAME BY SALE, LEASE, T RADE OR OTHERWISE ON I.T.A NO.1159/CHNY/2019 :- 5 -: SUCH TERMS AS MAY DEEM FIT. IN PURSUANCE OF THE AF ORESAID MAIN OBJECT, THE ASSESSEE-COMPANY HAS CONSTRUCTED A 30,000 SQ. F T. COMMERCIAL COMPLEX AND LET OUT SHOPS ON LEASE AND PROVIDES VAR IOUS AMENITIES AND FACILITIES AND SUBMITTED THAT THE INTENTION OF THE ASSESSEE IS ONLY TO EXPLOIT THE PROPERTY FOR A BUSINESS PURPOSE THEREFO RE, THE INCOME ARISING OUT OF THE EXPLOITATION OF THE PROPERTY HAS TO BE TREATED AS INCOME FROM BUSINESS. 8. HE FURTHER SUBMITTED THAT THE CASE IS SQUARELY C OVERED BY THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (SUPRA) , AND STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). THE LD. COUNSEL FOR THE ASSESSEE FURTHER RELIED ON THE FOLLOWING CASE LAWS: 1) RAYALA CORPORATION (P.) LTD. V. ACIT [2016] 386 ITR 500 (SC), 2) M/S. PSTS HEAVY LIFT AND SHIFT LTD., VS. DCIT IN TA X CASE APPEAL NOS.2193 TO 2195 OF 2008 & 979 OF 2009 (MAD.). 3) CIT V. THIRUVANANTHAPURAM V. OBERON EDIFICES & ESTA TES (P.) LTD. [2019] 103.TAXMANN.COM 413 (KER.) 4) PCIT, PUNE V. KROME PLANET INTERIORS (P.) LTD. [202 0] 423 ITR 62 (BOM.) 5) PCIT V. CITY CENTRE MALL NASHIK (P.) LTD. [2020] 42 4 ITR 85 (BOM.) 9. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED IN AUGUST, 2007 I.T.A NO.1159/CHNY/2019 :- 6 -: UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. TH E MAIN OBJECTS OF THE COMPANY ARE 1) TO PURCHASE, OWN OR OTHERWISE AC QUIRE BY WAY OF MORTGAGE, LEASE, LICENSE IN INDIA OR ELSEWHERE, ANY RIGHT, TITLE AND INTEREST IN REAL ESTATES OF ALL KINDS AND DEAL IN T HE SAME BY SALE, LEASE, TRADE OR OTHERWISE ON SUCH TERMS AS MAY DEEM FIT. 2 ) TO ACQUIRE, PROMOTE, CO-PROMOTE, DESIGN, CONSTRUCT, DEVELOP, DE MOLISH, FURNISH, RE- ERECT, REFURBISH, REBUILD, RENOVATE, MODIFY OR MAIN TAIN IN INDIA OR ELSEWHERE ALL TYPES OF PROPERTIES INCLUDING FLATS, PUBLIC RESIDENTIAL COMPLEXES, HOMES, RESIDENCES, BUNGALOWS, APARTMENTS , CONDOMINIUMS OFFICES, OFFICE SPACE, COMMERCIAL SPACE, SHOPPING M ALLS, SHOPPING COMPLEXES, AUDITORIUMS, FACTORIES, TENEMENTS, PARKS , TOWNSHIPS, INFRASTRUCTURE PROJECTS, MULTIPLEXES, TECH PARKS, I T PARKS, PARKS, SPECIAL ECONOMIC ZONES (SEZ), HOTELS, RESORTS, RESTAURANTS, CASINOS, CLUBS, INNS, TAVERNS, GOLF COURSES, FACTORY, WAREHOUSE, GO DOWNS AND QUARTERS, 3) TO CARRY ON THE BUSINESS OF ADVISING, DEALING, B ROKING, CONSULTING, MANAGING, MARKETING, HOUSEKEEPING, INVESTING IN IND IA OR ELSEWHERE IN ALL KINDS OF PROPERTIES INCLUDING FLATS, PUBLIC RES IDENTIAL COMPLEXES, HOMES, RESIDENCES, BUNGALOWS, APARTMENTS, CONDOMINI UMS, OFFICES, OFFICE SPACE, COMMERCIAL SPACE, SHOPPING MALLS, SHO PPING COMPLEXES, AUDITORIUMS, FACTORIES, TENEMENTS, PARKS, TOWNSHIPS , INFRASTRUCTURE PROJECTS, MULTIPLEXES, TECH PARKS, IT PARKS, PARKS, SPECIAL ECONOMIC I.T.A NO.1159/CHNY/2019 :- 7 -: ZONES(SEZ), HOTELS, RESORTS, RESTAURANTS, CASINOS, CLUBS, INNS, TAVERNS, GOLF COURSES, FACTORY, WAREHOUSE, GODOWNS AND QUART ERS. 10. THE ASSESSEE IS ALSO HAVING INCIDENTAL OR ANCIL LARY OBJECTS TO THE ATTAINMENT OF MAIN OBJECTS, WHICH IS AT SR. NO.12 & 19 OF MEMORANDUM OF ASSOCIATION ARE AS UNDER: 12. TO ACQUIRE PROPERTY AND RIGHTS WHICH THE COMP ANY MAY THINK NECESSARY OR CONVENIENT FOR THE PURPOSES OF ITS BUS INESS OR OTHERWISE AND IN PARTICULAR TO BUILD, CONSTRUCT, PU RCHASE, ALTER, ENLARGE, DISMANTLE, MAINTAIN, REMOVE OR REPLACE AND TO WORK, MANAGE, HIRE AND CONTROL, ANY LAND, BUILDINGS, OFFI CES, FACTORIES, SHOPS, MACHINERY ENGINES, RAILWAY SIDINGS AND OTHER WORKS AND CONVENIENCES AND TO SELL, LET ON LEASE OR OTHERWISE DISPOSE OFF OR GRANT RIGHTS OVER ANY PROPERTY BELONGING TO THE COM PANY. 19. TO IMPROVE, MANAGE, WORK, DEVELOP, LEASE, MORTG AGE, TURN TO ACCOUNT, ABANDON OR OTHERWISE DEAL WITH ALL OR ANY PART OF THE PROPERTIES, RIGHTS AND CONCESSIONS OF THE COMPANY. 11. THE ASSESSEE-COMPANY WITH THE ABOVE OBJECTS AND MAIN ANCILLARY OBJECTS, CONSTRUCTED A 30,000 SQ. FT. COMPLEX AND H AS LET OUT VARIOUS SHOPS TO VARIOUS LESSEES. THE ASSESSEE HAS POINTED OUT FROM THE PAPER BOOK PAGE NOS.67 TO 88, WHICH IS A LEASE AGRE EMENT, ENTERED BY THE ASSESSEE WITH LOUIS VUITTON INDIA PVT. LTD. ON 06.06.2012 AND ALSO SUBMITTED THAT THE ASSESSEE HAS ENTERED SIMILAR AGR EEMENT WITH OTHER LESSEES ALSO. AS PER THE LEASE AGREEMENT, THE ASSES SEE LESSOR RESPONSIBLE FOR CLEANINESS AND MAINTENANCE OF THE M ALL AS PER CLAUSE- 7. FURTHER, THE LESSEE HIS OWN OBLIGATION TO PAY TH E MAINTENANCE CHARGES RELATING TO COMMON AREA EXPENSES FOR SECURI TY, CLEANING, I.T.A NO.1159/CHNY/2019 :- 8 -: ELECTRICITY, MAINTENANCE OF SANITARY, PLUMBING, COM MON EQUIPMENTS, HOUSEKEEPING, REPAIR AND AMC OF THE LIFTS/GENERATOR S, MAINTENANCE AND REPAIR AND INSURANCE OF BUILDING ETC. AND THE L ESSOR SUBMITTED A COMPLETE AUDIT DOCUMENT OF ALL CHARGES COLLECTED. FROM THE ABOVE, IT IS VERY CLEAR THAT THE ASSESSEE HAS NOT SIMPLY LET OUT THE SHOPS TO LESSEES. IT IS THE OBLIGATION OF THE ASSESSEE-COMPA NY TO MAINTAIN ENTIRE SHOP INCLUDING SECURITY, CLEANING, ELECTRICITY, SAN ITARY, PLUMBING, HOUSEKEEPING, REPAIRS AND AMC OF THE LIFTS/GENERATO RS, MAINTENANCE OF REPAIR AND INSURANCE OF BUILDING ETC. FROM THE ABO VE, IT IS VERY CLEAR THAT THE ASSESSEE IS EXPLOITING SHOPPING MALL AS A BUSINESS IN A SYSTEMATIC AND ORGANIZED MANGER THEREFORE, THE ACTI VITIES CARRIED BY THE ASSESSEE ARE IN THE NATURE OF COMMERCIAL ACTIVITY. THEREFORE, THE INCOME ARISING OUT OF SYSTEMATIC ACTIVITY OF THE AS SESSEE HAS TO BE TREATED AS BUSINESS INCOME. IN THE ASSESSMENT ORDE R, THE A.O HAS NOTED THAT THE ASSESSEE FROM THE INCORPORATION I.E. , IN THE YEAR 2007 TO TILL DATE, THE ASSESSEE HAS CONSTRUCTED ONLY ONE CO MMERCIAL BUILDING WITH THE AMOUNT BORROWED FROM ITS DIRECTORS LET OUT THE SAME TO THE VARIOUS TENANTS. HE ALSO OBSERVED THAT TO DECIDE W HETHER THE INCOME FROM PROPERTY IS A BUSINESS INCOME OR HOUSE PROPERT Y INCOME, THE IMPORTANT CRITERIA IS HOW THE PROPERTY IS EXPLOITED TO EARN THE INCOME. IN THIS CASE, THE COMMERCIAL BUILDING WAS EXPLOITED TO EARN THE RENTAL INCOME. MOREOVER, IF ANY INCOME CLEARLY BE CHARGED TO ANY HEAD, IT I.T.A NO.1159/CHNY/2019 :- 9 -: SHOULD BE TAXED UNDER THAT HEAD OF INCOME ONLY. IF ANY INCOME IS NOT ABLE TO CHARGE TO ANY PARTICULAR HEAD, THEN IT SHOU LD BE CHARGED UNDER THE HEAD INCOME FROM OTHER SOURCES AS IT IS RESIDUA RY HEAD OF INCOMES. FROM THE ABOVE, THE OPINION OF THE A.O IS THAT THE ASSESSEE HAS CONSTRUCTED ONLY ONE BUILDING AND LET OUT THE SAME TO THE VARIOUS TENANTS. THEREFORE, AS PER S. 22 OF THE INCOME TAX , 1961, IT HAS TO BE TAXED AS INCOME FROM HOUSE PROPERTY. THE A.O IN FA CT HAS IGNORED THE MAIN OBJECT OF THE COMPANY AND ALSO VARIOUS SERVICE S AND FACILITIES PROVIDED BY THE ASSESSEE. BY CONSIDERING THE ENTIR E FACTS OF THIS CASE, WE ARE OF THE OPINION THAT THE INCOME EARNED BY THE ASSESSEE IN THIS CASE HAS TO BE TAXED INCOME FROM BUSINESS AND THE I SSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (SUPRA ). IN SO FAR AS THE CASE LAW RELIED ON BY THE LD. D.R IN THE CASE OF RAJ DADARKAR & ASSOCIATES VS. ACIT (SUPRA) IS CONCERNED, THE HONBLE JURISDICTION MADRAS HIGH COURT HAS CONSIDERED THE VERY SAME JUDG MENT IN THE CASE OF M/S. PSTS HEAVY LIFT AND SHIFT LTD. (SUPRA), WHEREIN THE HONBLE HIGH COURT ELABORATELY DISCUSSED THE ISSUE WHICH IS REPRODUCED AS UNDER: 15. SIMILARLY, IN RAJ DADARKAR & ASSOCIATES V. ASS ISTANT COMMISSIONER OF INCOME TAX [(2017) 394 ITR 592 (SC) ], THE SAME POSITION WAS RE-ITERATED IN THE FOLLOWING MANNER: '14) THERE MAY BE INSTANCES WHERE A PARTICULAR INCO ME MAY APPEAR TO FALL IN MORE THAN ONE HEAD. THESE KIND OF CASES OF OVERLAPPING HAVE FREQUENTLY ARISEN UNDER THE TWO HE ADS WITH I.T.A NO.1159/CHNY/2019 :- 10 -: WHICH WE ARE CONCERNED IN THE INSTANT CASE AS WELL, NAMELY, INCOME FROM THE HOUSE PROPERTY ON THE ONE HAND AND PROFITS AND GAINS FROM BUSINESS ON THE OTHER HAND. ON THE F ACTS OF A PARTICULAR CASE, INCOME HAS TO BE EITHER TREATED AS INCOME FROM THE HOUSE PROPERTY OR AS THE BUSINESS INCOME. TESTS WHICH ARE TO BE APPLIED FOR DETERMINING THE REAL NATURE OF IN COME ARE LAID DOWN IN JUDICIAL DECISIONS, ON THE INTERPRETATION O F THE PROVISIONS OF THESE TWO HEADS. WHEREVER THERE IS AN INCOME FRO M LEASING OUT OF PREMISES AND COLLECTING RENT, NORMALLY SUCH AN INCOME IS TO BE TREATED AS INCOME FROM HOUSE PROPERTY, IN CAS E PROVISIONS OF SECTION 22 OF THE ACT ARE SATISFIED WITH PRIMARY INGREDIENT THAT THE ASSESSEE IS THE OWNER OF THE SAID BUILDING OR L ANDS APPURTENANT THERETO. SECTION 22 OF THE ACT MAKES A NNUAL VALUE OF SUCH A PROPERTY AS INCOME CHARGEABLE TO TAX UNDE R THIS HEAD. HOW ANNUAL VALUE IS TO BE DETERMINED IS PROVIDED IN SECTION 23 OF THE ACT. OWNER OF THE HOUSE PROPERTY IS DEFINE D IN SECTION 27 OF THE ACT WHICH INCLUDES CERTAIN SITUATIONS WHE RE A PERSON NOT ACTUALLY THE OWNER SHALL BE TREATED AS DEEMED O WNER OF A BUILDING OR PART THEREOF. IN THE PRESENT CASE, THE APPELLANT IS HELD TO BE DEEMED OWNER OF THE PROPERTY IN QUESTI ON BY VIRTUE OF SECTION 27(IIIB) OF THE ACT. ON THE OTHER HAND, UNDER CERTAIN CIRCUMSTANCES, WHERE THE INCOME MAY HAVE BEEN DERIV ED FROM LETTING OUT OF THE PREMISES, IT CAN STILL BE TREATE D AS BUSINESS INCOME IF LETTING OUT OF THE PREMISES ITSELF IS THE BUSINESS OF THE ASSESSEE. 15) WHAT IS THE TEST WHICH HAS TO BE APPLIED TO DET ERMINE WHETHER THE INCOME WOULD BE CHARGEABLE UNDER THE HE AD INCOME FROM THE HOUSE PROPERTY OR IT WOULD BE CHA RGEABLE UNDER THE HEAD PROFITS AND GAINS FROM BUSINESS OR PROFESSION, IS THE QUESTION. IT MAY BE MENTIONED, IN THE FIRST INSTANCE, THAT MERELY BECAUSE THERE IS AN ENTRY IN THE OBJECT CLAU SE OF THE BUSINESS SHOWING A PARTICULAR OBJECT, WOULD NOT BE THE DETERMINATIVE FACTOR TO ARRIVE AT A CONCLUSION THAT THE INCOME IS TO BE TREATED AS INCOME FROM BUSINESS. SUCH A QUEST ION WOULD DEPEND UPON THE CIRCUMSTANCES OF EACH CASE. IT IS S O HELD BY THE CONSTITUTION BENCH OF THIS COURT IN SULTAN BROS . (P) LTD. V. CIT, (1964) 5 SCR 807.' (EMPHASIS SUPPLIED). 16. IN VIEW OF THE SETTLED LEGAL POSITION ABOVE, WI TH WHICH WE RESPECTFULLY AGREE, WE DO NOT FIND ANY LATER AND RE CENT CONTRARY VIEW OF THE AFORESAID LEGAL POSITION. THE EARLIER DECISI ONS RENDERED BY MADRAS HIGH COURT, BASED ON ITS VIEWS IN CIT V. CHENNAI PROPERTIES AND INVESTMENT PVT. LTD. [(2004) 266 ITR 685], CANNOT BE NOW RELIED UPON BY THE LEARNED COUNSEL FOR THE R EVENUE, IN VIEW OF THE REVERSAL OF THE SAID JUDGMENT BY THE SUPREME COURT IN M/S. CHENNAI PROPERTIES AND INVESTMENT PVT. LTD. V. CIT [(2015) 373 ITR 673 (SC)] . THE OTHER JUDGMENTS RELIED UPON BY THE REVENUE AR E ALSO RENDERED IN DIFFERENT CONTEXT. I.T.A NO.1159/CHNY/2019 :- 11 -: 17. WE ARE OF THE CLEAR OPINION THAT ONCE THE PROPE RTY IN QUESTION IS USED AS BUSINESS ASSET AND THE EXCLUSIVE BUSINESS O F THE ASSESSEE COMPANY OR FIRM IS TO EARN INCOME BY WAY OF RENTAL OR LEASE MONEY, THEN SUCH RENTAL INCOME CAN BE TREATED ONLY AS THE 'BUSINESS INCOME OF THE ASSESSEE' AND NOT AS 'INCOME FROM HOU SE PROPERTY'. THE HEADS OF INCOME IS DIVIDED IN VARIOUS SIX HEADS , INCLUDING 'INCOME FROM HOUSE PROPERTY', WHICH DEFINES THE SPE CIFIC SOURCE OF EARNING SUCH INCOMES. THE INCOME FROM HOUSE PROPERT Y IS INTENDED TO BE TAXED UNDER THAT HEAD MAINLY IF SUCH INCOME I S EARNED OUT OF IDLE PROPERTY, WHICH COULD EARN THE RENTAL INCOME B Y USER THEREOF FROM THE LESSEES. BUT, WHERE THE INCOME FROM THE SAME PROPERTY IN THE FORM OF LEASE RENTALS IS THE MAIN SOURCE OF BUSINESS OF THE ASSES SEE, WHICH HAS ITS BUSINESS EXCLUSIVELY OR SUBSTANTIALLY IN THE FO RM OF EARNING OF THE RENTALS ONLY FROM THE BUSINESS ASSETS IN THE FORM O F SUCH LANDED PROPERTIES, THEN, IN OUR OPINION, THE MORE APPROPRI ATE HEAD OF INCOME APPLICABLE IN SUCH CASES WOULD BE 'INCOME FR OM BUSINESS'. 12. THE HONBLE JURISDICTION HIGH COURT HAS CONSIDE RED THE DECISION OF THE CONSTITUTIONAL BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF SULTANS BROTHERS (P.) LTD. V. CIT [1964] 51 ITR 353 (SC) AND OBSERVED THAT WHERE THE INCOME MAY HAVE BEEN DERIVE D FROM LETTING OUT OF THE PREMISES, IT CAN BE TREATED AS BUSINESS INCOME, IF LETTING OUT OF THE PREMISES ITSELF IS THE BUSINESS OF THE ASSES SEE. IT IS FURTHER OBSERVED THAT WHETHER THE INCOME FROM HOUSE PROPERT Y OR BUSINESS INCOME, IT HAS TO BE DECIDED BASED ON THE FACTS AND CIRCUMSTANCES OF EACH CASE. IT IS FURTHER OBSERVED THAT WHETHER THE INCOME FROM SAME PROPERTY IN THE FORM OF LEASE RENTALS, IS THE MAIN SOURCE OF BUSINESS OF THE ASSESSEE, WHICH HAS ITS BUSINESS EXCLUSIVELY OR SUBSTANTIALLY IN THE FORM OF EARNING OF THE RENTAL ONLY FROM THE BUSINES S ASSETS IN THE FORM OF SUCH LANDED PROPERTIES, THEN, IN OUR OPINION, TH E MORE APPROPRIATE I.T.A NO.1159/CHNY/2019 :- 12 -: HEAD OF INCOME APPLICABLE IN SUCH CASES WOULD BE I NCOME OF BUSINESS. 13. IN THE PRESENT CASE, THE ASSESSEE MAIN OBJECT I S TO CONSTRUCT BUILDINGS AND LEASED OUT THE SAME FOR THE PURPOSE O F BUSINESS THEREFORE, THE MAIN OBJECT OF THE ASSESSEE ITSELF I S TO CARRY THE BUSINESS, THE INCOME ARISING OUT OF SUCH AN ACTIVIT Y HAS TO BE TREATED AS A BUSINESS INCOME. 14. THE HONBLE SUPREME COURT IN THE CASE OF SULTANS BROTHERS (P.) LTD. V. CIT (SUPRA) , HAS CONSIDERED BY THE HONBLE JURISDICTION HIGH COURT IN THE ABOVE JUDGMENT AND OBSERVED THAT WHERE PARTICULAR INCOME HAS TO BE DETERMINED WHETHER IT IS INCOME FR OM HOUSE PROPERTY OR BUSINESS INCOME IT IS DEPEND UPON THE FACTS AND CIRCUMSTANCES OF THE EACH CASE. IN THE PRESENT CASE, BY CONSIDERING THE OBJECTS OF THE ASSESSEE AND ALSO VARIOUS OTHER FACILITIES PROVIDED BY THE ASSESSEE, WE ARE OF THE OPINION THAT THE INCOME OF THE ASSESSEE HAS TO BE TREATED AS INCOME FROM BUSINESS AND THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF RAJ DADARKAR & ASSOCIATES VS. ACIT (SUPRA) , HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. 15. THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT V. THIRUVANANTHAPURAM V. OBERON EDIFICES & ESTATES (P. ) LTD. I.T.A NO.1159/CHNY/2019 :- 13 -: (SUPRA), HAS HELD THAT WHERE PRIMARY INTENTION OF THE ASSESSEE F OR LETTING OUT THE SHOPS IN A MALL WAS COMMERCIAL EXPL OITATION OF THE PROPERTY, INCOME DERIVED FROM THE SALE WOULD BE ASS ESSED AS INCOME FROM BUSINESS NOT AS INCOME FROM HOUSE PROPERTY. 16. THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF PCIT V. KROME PLANET INTERIORS (P.) LTD. (SUPRA), HAS HELD THAT WHERE THE ASSESSEE LEASED OUT SHOPS IN A MALL ALONG WITH VARIOUS OTHER FACILITIES AND AMENITIES, IN VIEW OF THE FACT THAT IT WAS NOT A CA SE OF GIVING SHOPS ON RENT SIMPLICITOR RATHER THE ASSESSEE DESIRED TO ENT ER INTO A BUSINESS OF RENTING OUT COMMERCIAL SPACE TO INTERESTED INDIVIDU ALS AND BUSINESS HOUSES, AMOUNT RECEIVED BY THE ASSESSEE FROM SAID A CTIVITY WAS TO BE BROUGHT TO TAX AS A BUSINESS INCOME. 17. RECENTLY, THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PCIT V. CITY CENTRE MALL NASHIK (P.) LTD. (SUPRA), HAS HELD THAT WHERE THE ASSESSEE LEASED OUT SHOPS IN A MALL ALONG WITH VARI OUS OTHER FACILITIES AND AMENITIES. IN VIEW OF THE FACT THAT THE ASSESS EE DID NOT MERELY INTENDED TO GIVE SHOPS ON RENT RATHER THE ASSESSEE HAS INTENDED TO DO BUSINESS OF RENTING OUT COMMERCIAL SPACE TO INTERES TED PARTIES AMOUNT RECEIVED BY THE ASSESSEE WAS TO BROUGHT TO TAX AS A BUSINESS INCOME. I.T.A NO.1159/CHNY/2019 :- 14 -: 18. WE, THEREFORE RESPECTFULLY FOLLOWING THE ABOVE JUDICIAL PRECEDENCE AND ALSO BY CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE INCOME EARNED BY THE AS SESSEE BY CONSTRUCTING THE SHOPPING MALL AND LETTING OUT THE SAME BY PROVIDING VARIOUS FACILITIES ARE AMOUNTING TO BUSINESS ACTIVI TY OF THE ASSESSEE AND THE INCOME EARNED OUT OF SUCH AN ACTIVITY HAS TO BE TREATED AS A BUSINESS INCOME. FURTHER, THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (SUPRA ), SQUARELY APPLIES TO THE FACTS OF THIS CASE AND THE LD. CIT(A) HAS RIGHTLY FOLLOWED THE SAME. HENCE, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). THUS, THE APPEAL FILED BY THE REVE NUE IS DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 08 TH OCTOBER, 2021 IN CHENNAI. SD/ - SD/ - ( ) (G. MANJUNATHA) /ACCOUNTANT MEMBER ( ) (V. DURGA RAO) /JUDICIAL MEMBER /CHENNAI, /DATED: 08 TH OCTOBER, 2021 . EDN/- /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF