DY.CIT.,-8(1), MUMBAI V. E-CITY REAL ESTATES PVT.LTD., MUMBAI

ITA 1436/MUM/2012

• Counselvise Citation: 143619914 RSA 2012
• Duration Of Justice: 2 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 14-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 02-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH RANJAN PRASAD
• Keywords: Business income; Rule of consistency; Cost of acquisition

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI H.L. KARWA, HONBLE PRESIDENT AND P.M . JAGTAP, AM {{ { .. , .. , ./ I.T.A. NO. 8390 /MUM/2010 ( / ASSESSMENT YEAR : 2007-08 THE DY. COMMISSIONER OF INCOME TAX 8(1), ROOM NO. 210, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. M/S E-CITY PROJECT CONSTRUCTION PVT. LTD., 844/4, SHAH INDL. ESTATE, OFF NEW LINK ROAD, ANDHERI (E), MUMBAI 400 053. ./ PAN : AABCE5486E ( ! / APPELLANT ) .. ( '#! / RESPONDENT ) ./ I.T.A. NO. 1435 /MUM/2012 ( / ASSESSMENT YEAR : 2007-08 ./ I.T.A. NO. 1436 /MUM/2012 ( / ASSESSMENT YEAR : 2008-09 JT. DY. COMMISSIONER OF INCOME TAX (OSD), RANGE 8(1), ROOM NO. 260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. M/S E-CITY REAL ESTATES PVT. LTD., 844/4, FUN REPUBLIC, SHAH INDL. ESTATE, OFF NEW LINK ROAD, ANDHERI (E), MUMBAI 400 053. ./ PAN : AAJCS5879F ( ! / APPELLANT ) .. ( '#! / RESPONDENT ) ./ I.T.A. NO. 1230 /MUM/2013 ( / ASSESSMENT YEAR : 2009-10 THE DY. COMMISSIONER OF INCOME TAX 8(1), ROOM NO. 260A, 2 ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / VS. M/S E-CITY PROJECT CONSTRUCTION PVT. LTD., 844/4, SHAH INDL. ESTATE, OFF NEW LINK ROAD, ANDHERI (E), MUMBAI 400 053. ./ PAN : AABCE5486E ( ! / APPELLANT ) .. ( '#! / RESPONDENT ) ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 2 REVENUE BY SHRI RAJESH RANJ AN PRASAD R E SPONDENT BY : SHRI VIJAY MEHTA ' ( / DATE OF HEARING : 14-07-2014 ' ( / DATE OF PRONOUNCEMENT : 30-7-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THESE FOUR APPEALS FILED BY THE REVENUE IN THE CASE S OF TWO ASSESSEES ARE DIRECTED AGAINST FOUR SEPARATE ORDERS PASSED BY THE LD. CIT (A) 16, MUMBAI. SINCE A COMMON ISSUE IS INVOLVED IN ALL THE SE APPEALS, THE SAME HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY COMMON ISSUE INVOLVED IN ALL THESE FOUR APPEALS IS WHETHER THE OPERATIONAL INCOME (RENT) RECEIVED BY THE ASSES SEE FROM RUNNING AND OPERATIONS FAMILY ENTERTAINMENT CENTRE CUM MALL A ND SERVICE CHARGES RECOVERED ARE CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AS CL AIMED BY THE ASSESSEE OR UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS HELD BY THE A.O. 3. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH ESE APPEALS ARE AS FOLLOWS. ONE COMPANY NAMELY E-CITY PROJECT CONSTRUCTION PVT. LTD. WAS ENGAGED IN THE BUSINESS OF ACQUISITION OF IMMOVABLE PROPERTIES , CONSTRUCTING, DEVELOPING AND BUILDING FAMILY ENTERTAINMENT CENTRE CUM MALLS ACROSS INDIA AND LEASING (SHORT TERM AND LONG TERM), LICENSING, RENT ING, MANAGING, OPERATING AND RUNNING THE SAME FOR COMMERCIAL USE BY PROVIDIN G NECESSARY INFRASTRUCTURE. AS A RESULT OF DEMERGER OF THE SAI D COMPANY, WHICH TOOK PLACE ON 1-4-2006, BOTH THE ASSESSEE COMPANIES IN THE PRE SENT CASE CAME INTO EXISTENCE AND CONTINUED TO BE IN THE SAME BUSINESS AS THAT OF THE DEMERGED ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 3 COMPANY. THESE COMPANIES EARNED SUBSTANTIAL OPERATI NG INCOME FROM THE MALL IN THE FORM OF RENT AND SERVICE CHARGES RECOVE RED FROM THE OCCUPANTS OF THE MALL. IN THE RETURNS OF INCOME FILED FOR THE YE ARS UNDER CONSIDERATION, THE SAID INCOME WAS DECLARED BY BOTH THE ASSESSEE COMPA NIES UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AND A FTER CLAIMING VARIOUS EXPENSES, THE NET INCOME/LOSS WAS OFFERED BY THEM T O TAX. ACCORDING TO THE A.O., THE INCOME RECEIVED BY THE ASSESSEE IN THE FO RM OF RENT AND SERVICE CHARGES WAS CHARGEABLE TO TAX UNDER THE HEAD INCOM E FROM HOUSE PROPERTY AND THE SAME WAS OFFERED BY THE ASSESSEE UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION IN ORDER TO AVOID TAX BY CLAIMING VARIOUS EXPENSES WHICH OTHERWISE WERE NOT ALLOWABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HE THEREFORE REQUIRED THE ASSESSEE TO EX PLAIN AS TO WHY THE SAID INCOME SHOULD NOT BE BROUGHT TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS THE PRIMARY OBJECT OF OPERATING MALLS WAS TO EARN RENTAL INCOME BY LETTING OUT THE PROPERTY. IN REPLY FILED IN WR ITING, THE FOLLOWING SUBMISSION WAS MADE BY THE ASSESSEE COMPANIES IN SUPPORT OF TH EIR CLAIM THAT THE INCOME RECEIVED FROM THE RUNNING OF MALL IN THE FOR M OF RENT AND OTHER SERVICE CHARGES WAS CHARGEABLE TO TAX UNDER THE HEAD PROFI TS AND GAINS OF BUSINESS OR PROFESSION: AS PER THE MAIN OBJECTS OF THE MEMORANDUM OF ASSOC IATION, THE COMPANY IS PERMITTED TO CARRY ON THE FOLLOWING BUSI NESSES: TO CARRY ON THE BUSINESS AS BUILDERS AND GENERAL C ONSTRUCTION CONTRACTORS AND OWN, SELL, ACQUIRE, PROCESS, DEVELO P, CONSTRUCT, DEMOLISH, ENLARGE, REBUILD, RENOVATE, DECORATE, REP AIR, MAINTAIN, LET OUT, HIRE, LEASE, RENT, PLEDGE, MORTGAGE OR OTH ERWISE DEAL N CONSTRUCTION OF ALL DESCRIPTION LIKE LAND, BUILDING S, FLATS, SHOPS, COMMERCIAL, EDUCATION AND NON COMMERCIAL COMPLEX, H OUSES AND OTHER IMMOVABLE PROPERTIES OF ANY TENURE AND AN Y INTEREST THEREIN, HOTELS, CINEMA HOUSES, AUDITORIUMS, GALLER Y, CLUB HOUSES, ROADS, BODY BUILDINGS, AIRPORTS, TOWER PLAT FORMS, HIGHWAYS, TUNNELS, PIPELINES, HOSPITALS, NURSING HO MES, CLINICS, GODOWNS, WAREHOUSES, FACTORIES, COLLEGES, SCHOOLS, TOWNSHIPS, FREEHOLD & LEASEHOLD GROUNDS AND LAND DEVELOPING PR OPERTIES IN GENERAL. ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 4 ` IN OTHER WORDS, THE ASSESSEE IS ENGAGED IN THE BU SINESS OF ACQUIRING IMMOVABLE PROPERTIES AND CONSTRUCTING, DEVELOPING A ND BUILDING FAMILY ENTERTAINMENT CENTRE CUM MALLS AND LEASING , LICENSING, RENTING AND MANAGING, OPERATING AND RUNNING THE SAM E FOR COMMERCIAL USE AND SETTING UP NECESSARY INFRASTRUCTURE. THE FIXED ASSETS OF THE ASSESSEE INCLUDE BUILDING A ND PLANT AND MACHINERY CAPITALIZED IN THE EARLIER YEARS. PLANT A ND MACHINERY MAINLY INCLUDES FIRE FIGHTING EQUIPMENTS, ELECTRICAL INSTA LLATIONS, AIR CONDITIONER, CHILLERS, HVA C WORK, ESCALATORS ETC. IN THE PRESENT CASE, THE PROPERTY IS DEVELOPED WITH A VIEW OF COMMERCIAL EXPLOITATION AND THE PRIME OBJECT IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES. THE ASSESS EE PROVIDES COMPLETE INTEGRATED FACILITY TO THE LESSEE LIKE ELE CTRICITY, AIR CONDITIONING AND BASIC INTERIORS. FURTHER, IN TERMS OF THE AGREEMENT WITH THE LICENSE E FOR LEASE OF PREMISES, THE LESSOR (I.E. ASSESSEE) AGREES TO PROV IDE CERTAIN SERVICES AS DETAILED IN CLAUSE 7 OF THE AGREEMENT. ALONGWITH THE CONSTRUCTION OF FAMILY ENTERTAINMENT CENTERS, THE ASSESSEE IS DEVELOPING AND LETTING OUT PROPERTY ALO NG WITH BASIC AMENITIES, INFRASTRUCTURE ETC. WHICH IS ESSENTIAL F OR THE BUSINESS OF THE LESSEE. THIS INVOLVES COMPLIANCE OF STRINGENT COMPL EX REGULATORY REQUIREMENTS AS REGARDS PROVISIONS OF COMMON TOILET FACILITIES, HOUSEKEEPING FACILITIES, ELECTROMECHANICAL MAINTENA NCE, EQUIPMENTS, FIRE SYSTEMS, COMMON AREA, LIFT ESCALATOR ETC. IN T HE CASE OF THE ASSESSEE, THE BENEFIT OF THE FACILITIES BY THE LESS EE IS INTEGRAL TO THEIR USE OF THE LEASED PREMISES AND FOR CARRYING ON MULTIPLE X BUSINESS. ALSO, THE BUILDING PREMISES WILL ALSO BE USE FOR ADVERTISEMEN T PURPOSES BY WAY OF HOARDINGS ETC. INCOME FROM WHICH PARTAKES THE CHARA CTER OF BUSINESS. IN THE PRESENT CASE, COMPLEX FIT-OUTS ARTE INSTALLE D AS PER THE STRICT REQUIREMENTS OF THE OCCUPANTS AS ALSO AS PER THE RE GULATORY REQUIREMENTS. LETTING OUT OF THE PREMISES IS NOT PO SSIBLE WITHOUT THE RELEVANT SERVICES, AMENITIES AND FACILITIES AND LET TING OUT OF PREMISES AND UTILITIES AND FIT-OUTS ARE INSEPARABLE AND INCO ME FROM SUCH COMPOSITE ACTIVITIES WOULD BE CHARGEABLE UNDER THE HEAD BUSINESS INCOME. MERELY BECAUSE INCOME IS ATTACHED TO ANY IMMOVABLE PROPERTY THAT CANNOT BE THE SOLE FACTOR FOR ASSESSMENT OF SUCH IN COME AS INCOME FROM PROPERTY. WHAT HAS TO BE SEEN IS WHAT WAS THE PRIMA RY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERTY. IF IT IS FO UND APPLYING SUCH TESTS THAT THE MAIN INTENTION IS FOR LETTING OUT THE PROP ERTY OR ANY PORTION THEREOF THE SAME MUST BE CONSIDERED AS RENTAL INCOM E OR INCOME FROM HOUSE PROPERTY. IN CASE IT IS FOUND THAT THE MAIN I NTENTION IS TO EXPLOIT ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 5 THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES IN THE EVENT IT MUST BE HELD AS BUSINESS INCOME. IN A RECENT JUDGMENT IN THE CASE OF PFH MALL & RETA IL MANAGEMENT VS. ITO (110 ITD 337) (KOL) (2008), THE TRIBUNAL HELD ON THE FACTS OF THE CASE, THAT INCOME DERIVED FROM CONSTRUCTION CUM MAN AGEMENT OF MALLS/BUSINESS CENTRES WAS TO BE ASSESSED TO TAX AS BUSINESS INCOME AND NOT AS PROPERTY INCOME. WHILE ARRIVING AT THE DECISION, THE TRIBUNAL RELIED ON THE JUDGMENT IN THE CASE OF EVEREST HOTELS LIMITED VS. CIT (114 ITR 779) (CAL) (1978) WHEREIN, THE HIGH COURT HELD THAT THE INCOME DERIVE D BY WAY OF LEASE RENT BY LETTING OUT THE PREMISES FOR RUNNING A HOTE L WAS ASSESSABLE AS BUSINESS INCOME SINCE RUNNING OF A HOTEL WAS A COMM ERCIAL ACTIVITY. TAKING A SUM TOTAL OF THE AFORESAID DECISIONS, IT CLEARLY APPEARS THAT MERELY BECAUSE INCOME IS ATTACHED TO ANY IMMOV ABLE PROPERTY THAT CANNOT BE THE SOLE FACTOR FOR ASSESSM ENT OF SUCH INCOME AS INCOME FROM PROPERTY. WHAT HAS TO BE SEEN IS WHAT WAS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOI TING THE PROPERTY. IF, IT IS FOUND APPLYING SUCH TESTS THAT THE MAIN INTENTION IS FOR LETTING OUT THE PROPERTY OR ANY PO RTION THEREOF, THE SAME MUST BE CONSIDERED AS RENTAL INCOME OR INC OME FROM HOUSE PROPERTY. IN CASE IT IS FOUND THAT THE MAIN I NTENTION IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX CO MMERCIAL ACTIVITIES IN THAT EVENT IT MUST BE HELD AS BUSINES S INCOME. IN THE PRESENT CASE, THE PROPERTY IS DEVELOPED WITH A VIEW OF COMMERCIAL EXPLOITATION AND THE PRIME OBJECT IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES. THIS IS NO T A MERE CASE OF A PERSON CONSTRUCTING A BUILDING TO BE USED FOR OFFIC E OR TABLE SPACE. THIS IS A CASE OF A PERSON CONSTRUCTING OF FAMILY ENTERT AINMENT CENTRES WHEREIN THE ASSESSEE IS DEVELOPING AND LETTING OUT PROPERTY ALONGWITH BASIC AMENITIES, INFRASTRUCTURE, ETC., WHICH IS ESS ENTIAL FOR THE BUSINESS OF THE LESSEE. THIS INVOLVES COMPLIANCE OF STRINGEN T COMPLEX REGULATORY REQUIREMENTS AS REGARDS PROVISIONS OF COMMON TOILET FACILITIES, HOUSEKEEPING FACILITIES, ELECTROMECHANICAL MAINTENA NCE, THE BENEFIT OF THE FACILITIES BY THE ASSESSEE IS INTEGRAL TO THEIR USE OF THE LEASED PREMISES AND FOR CARRYING MULTIPLEX BUSINESS. ALSO, THE BUILDING PREMISES WILL ALSO BE USED FOR CHARACTER OF BUSINES S. IN THE PRESENT CASE, COMPLEX FIT OUTS ARE INSTALLED AS PER THE STR ICT REQUIREMENTS OF THE OCCUPANTS AS ALSO AS PER THE REGULATORY REQUIREMENT S. LETTING OUT OF THE PREMISES IS NOT POSSIBLE WITHOUT THE RELEVANT SERVI CES, AMENITIES AND FACILITIES AND LETTING OUT OF PREMISES AND UTILITIE S AND FIT OUTS ARE INSEPARABLE AND INCOME FROM SUCH COMPOSITE ACTIVITI ES WOULD BE CHARGEABLE UNDER THE HEAD BUSINESS INCOME. ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 6 ACCORDINGLY, THE ASSESSEE HAS RIGHTLY TREATED RENTA L REVENUE FROM COMMERCIAL EXPLOITATION AS CHARGEABLE UNDER THE HEA D BUSINESS INCOME. 4. AFTER CONSIDERING THE SUBMISSION MADE BY THE ASS ESSEE, THE A.O. HELD THAT THE RATIO OF THE JUDICIAL PRONOUNCEMENTS RELIE D UPON BY THE ASSESSEE WAS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF TH E ASSESSEES CASE. HE ALSO DID NOT FIND THE SUBMISSION MADE BY THE ASSESSEE CO MPANIES IN SUPPORT OF THEIR CLAIM TO BE NOT ACCEPTABLE FOR THE FOLLOWING REASONS: 10. THE COLOURFUL CONTENTION OF THE ASSESSEE THAT THE ASSESSEE IS GIVING VARIOUS TYPES OF FACILITIES TO THE LESSEE IN RESPECT OF PROPERTY LET OUT AND HENCE THE INCOME FROM RENT IS ASSESSABLE UN DER THE HEAD INCOME FROM BUSINESS IS NOT ACCEPTABLE AS THE ASSES SEE COMPANY IS SOLELY WORKING WITH THE INTENTION TO EARN THE RENT FROM LETTING OUT THE PROPERTIES. 11. FURTHER, WHATEVER, THE FACILITIES, THE ASSESSEE COMPANY IS PROVIDING TO THE LESSEE IS ALSO RECOVERED BY THE AS SESSEE COMPANY WHICH IS ALSO A ONE TYPE OF RENT RECEIVED BY THE ASSESSEE . THE MAINTENANCE CHARGES RECOVERED BY THE ASSESSEE IN RESPECT OF VAR IOUS FACILITIES, SUCH AS ELECTRICITY BILL, WATER CHARGES, A.C. CHARGES, E TC. DOES NOT CHANGE THE CHARACTER OF EARNING OF RENT BY THE ASSESSEE. IF, T HE PROPERTY WOULD NOT HAVE BEEN LET OUT FOR EARNING RENT, THE ABOVE FACIL ITIES WOULD NOT HAVE BEEN PROVIDED BY THE ASSESSEE. HENCE, THE SOLE ENDE AVOR OF THE ASSESSEE COMPANY WAS TO EARN RENT FROM LETTING OUT OF THE PR OPERTY. 12. FURTHER, THE ASSESSEES CONTENTION THAT IN THE CASE OF DEMERGED COMPANY, I.E., M/S. E-CITY ENTERTAINMENT (INDIA) PV T. LTD. (ASSESSED WITH ACIT 6(2), MUMBAI), THE INCOME HAS BEEN ASSESS ED UNDER THE HEAD INCOME FROM BUSINESS AND HENCE, IN THE ASSESSEES CASE FOR THE YEAR UNDER CONSIDERATION ALSO, THE INCOME SHOULD BE ASSE SSED UNDER THE HEAD INCOME FROM BUSINESS. THIS CONTENTION IS ALSO NOT ACCEPTED BECAUSE, EACH ASSESSEE IS A DIFFERENT ASSESSEE AND EACH ASSESSMENT YEAR IS DIFFERENT ENTITY FOR THE PURPOSE OF INCOME TAX. AND, FURTHER, THE STAND TAKEN BY ONE ASSESSING OFFICER IS NOT BINDING ON OTHER ASSESSING OFFICER. THUS, THIS CONTENTION OF THE ASSESSEE ALS O DOES NOT SURVIVE AT ALL. 5. FOR THE REASONS GIVEN ABOVE AND RELYING, INTER A LIA, ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVEST MENTS PVT. LTD. REPORTED IN 129 TAXMAN 17, THE A.O. HELD THAT THE I NCOME EARNED BY THE ASSESSEE COMPANIES FROM OPERATING MALL IN THE FORM OF RENT AND OTHER SERVICE ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 7 CHARGES WAS CHARGEABLE TO TAX UNDER THE HEAD INCOM E FROM HOUSE PROPERTY AND NOT UNDER THE HEAD PROFITS AND GAINS OF BUSINE SS OR PROFESSION. ACCORDINGLY, HE ASSESSED THE SAID INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AFTER ALLOWING DEDUCTION ONLY ON ACCOUNT OF INTEREST AND STANDARD DEDUCTION U/S 24 AND DISALLOWING ENTIRELY THE OTHER EXPENSES CLAIMED BY THE ASSESSEE WHICH RESULTED IN SUBSTANTIAL ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE COMPANIES FOR THE YEARS UNDER CONSIDERATIO N. 6. THE ACTION OF THE A.O. IN TREATING THE INCOME FR OM OPERATION OF MALL IN THE FORM OF RENT AND OTHER SERVICE CHARGES AS INCOM E FROM HOUSE PROPERTY WAS CHALLENGED BY BOTH THE ASSESSEE COMPANIES IN THE AP PEALS FILED BEFORE THE LD. CIT(A) AND AFTER DISCUSSING THE RELEVANT CASE LAWS CITED BY THE ASSESSEE AND RELIED UPON BY THE A.O., THE LD. CIT(A) HELD THAT T HE ACTIVITY OF THE ASSESSEE OF OPERATING MALL WAS IN THE NATURE OF COMMERCIAL ACTI VITY. THE LD. CIT(A) ALSO HELD, FOR THE FOLLOWING REASONS GIVEN IN PARA NO. 2 .3.11, THAT THE ACTIVITY OF THE ASSESSEE OF OPERATING MALL WAS IN THE NATURE OF BUS INESS INCOME AND INCOME DERIVED FROM THE SAID ACTIVITY IN THE FORM OF RENT AND OTHER SERVICE CHARGES WAS ASSESSABLE AS BUSINESS INCOME AND NOT AS INCOME FROM HOUSE PROPERTY: 2.3.11 IN THE CASE OF PFH MALL & RETAIL MANA GEMENT (SUPRA), THE HONBLE ITAT HAS HELD THAT BEFORE ARRIVING AT A NY CONCLUSION ABOUT THE PARTICULAR HEAD UNDER WHICH THE INCOME DERIVED BY THE ASSESSEE IS REQUIRED TO BE ASSESSED, IT IS NECESSARY TO EXAMINE THE RELEVANT PROVISIONS OF THE AGREEMENTS THAT THE ASSESSEE HAD ENTERED INTO WITH THE USERS. IN ALL THE AGREEMENTS THE ASSESSEE IS SH OWN AS THE OWNER OF THE PREMISES IN WHICH THE SHOPPING MALLS/BUSINESS C ENTRES ARE LOCATED AND THE OTHER PARTY TO THE AGREEMENT IS SHOWN AS TH E USER. THE ASSESSEE, AS OWNER OF THE PREMISES, HAS THE RESPONS IBILITY OF PROVIDING SECURITY, COMMUNICATION AND OTHER SERVICES AS SPECI FIED IN THE AGREEMENTS. THE USERS DO NOT ENJOY EVEN ANY TENANCY RIGHT AS PER THE AGREEMENTS. THE SERVICE CHARGES PAYABLE BY THE USER S HAVE BEEN DETERMINED AT A FIXED RATE. CLEARLY THE ASSESSEE IS ENGAGED IN A COMPLEX SET OF ACTIVITIES, THE PURPOSE OF WHICH CANNOT BE R EGARDED AS MERELY EARNING OF RENTAL INCOME. THE VARIOUS FEATURES OF T HE AGREEMENTS, AS STATED ABOVE, ALSO INDICATE THAT THERE IS MUCH MORE THAN LETTING OUT OF THE PROPERTIES SIMPLICITER FOR EARNING RENTAL INCOM E. THE MERE FACT THAT THE INCOME IS ATTACHED TO IMMOVABLE PROPERTY CANNOT BE THE SOLE ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 8 CRITERION FOR ASSESSMENT OF SUCH INCOME AS INCOME F ROM HOUSE PROPERTY. IT IS NECESSARY TO DIG FURTHER TO FIND OU T WHAT IS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EXPLOITING THE PROPERT Y. IF IT IS FOUND THAT THE MAIN INTENTION IS SIMPLY LETTING OUT OF PROPERT Y OR ANY PORTION THEREOF, THE RESULTANT INCOME MUST BE ASSESSED AS I NCOME FROM HOUSE PROPERTY. IF, ON THE OTHER HAND, THE MAIN INTENTION IS FOUND TO BE THE EXPLOITATION OF THE IMMOVABLE PROPERTY BY WAY OF CO MMERCIAL ACTIVITIES, THEN THE RESULTANT INCOME MUST BE HELD AS BUSINESS INCOME. IN THE INSTANT CASE, SERVICES RENDERED BY THE ASSESSEE WER E THE RESULT OF ITS ACTIVITIES CARRIED ON CONTINUOUSLY IN AN ORGANIZED MANNER WITH A SET PURPOSE AND WITH A VIEW TO EARN PROFIT. HENCE, ALL THESE ACTIVITIES ARE IN THE NATURE OF COMMERCIAL ACTIVITIES. ACCORDINGLY TH E INCOME DERIVED BY THE ASSESSEE FROM SHOPPING MALLS/BUSINESS CENTRES I S TO BE ASSESSED AS BUSINESS INCOME AND NOT AS INCOME FROM HOUSE PROPER TY. 7. THE LD. CIT(A) ALSO EXAMINED THE VARIOUS CLAUSES OF THE AGREEMENTS ENTERED INTO BY THE ASSESSEE COMPANIES WITH THE PAR TIES INTERESTED IN HIRING COMMERCIAL SPACE IN THE MALLS AND RECORDED HIS FIND INGS ON SUCH EXAMINATION IN PARA 2.3.14 AND 2.3.15 OF HIS IMPUGNED ORDER AS UNDER:- 2.3.14 FACTS OF THE INSTANT CASE REVEALED THAT THE APPELLANT ENTERED INTO A CONDUCTING AGREEMENT WITH PARTIES IN TERESTED IN HIRING COMMERCIAL SPACE. THE APPELLANT SUBMITTED A SAMPLE COPY OF THIS CONDUCTING AGREEMENT WITH M/S FUSION CUISINES PRIVA TE LIMITED. A PERUSAL OF THE VARIOUS CLAUSES OF THE SAME REVEALED THAT APPELLANT HAD TO PROVIDE VARIOUS SERVICES TO THE CONDUCTOR IN THE FAMILY ENTERTAINMENT CENTRE CUM MALLS OWNED BY IT (REFER P AGE 5 PARA (IV OF THE AGREEMENT) : - I. HOUSEKEEPING/SANITATION SERVICES II. ELECTRICITY, WATER CHARGES FOR COMMON AREA III. HVAC FOR COMMON AREA IV. AMCS FOR ALL PLANT AND MACHINERY FACILITIES AN D AMENITIES PROVIDED IN THE MALL. V. LIFTS, ESCALATORS AND OTHER UTILITIES VI. CIVIL, PLUMBING, STRUCTURAL AND ALL OTHER REPAI RS REPLACEMENTS AND MAINTENANCE VII. MAINTENANCE AND UPKEEP OF BUILDING VIII. MALL MANAGEMENT AGENCYS FEES/CHARGES IX. INSURANCE OF ENTIRE BUILDING ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 9 X. HORTICULTURE/GARDEN/COMMON AREA/PASSAGE XI. AND ALL OTHER COSTS EXPENSES ATTRIBUTABLE TO TH E COMPLEX 2.3.15 TRADITIONALLY THE INCOME FROM LET OUT THE P ROPERTY SIMPLICITER PRESUPPOSES EXISTENCE OF AN OWNER-TENAN T RELATIONSHIP BETWEEN THE RECEIVER AND THE PAYER OF THE RENT. ONE OF THE PRINCIPAL CHARACTERISTICS OF SUCH RELATIONSHIP IS THAT THE TE NANT MUST ENJOY TENANCY RIGHTS, WHICH HE ACQUIRES THE MOMENT HE BEC OMES A TENANT. SECTION 55(2)(A) OF THE ACT EVEN SPEAKS OF THE COST OF ACQUISITION OF SUCH TENANCY RIGHTS FOR THE PURPOSE OF COMPUTATION OF CA PITAL GAINS ON TRANSFER THEREOF. IN THE INSTANT CASE THE AGREEMENT S ENTERED INTO SPECIFICALLY PROVIDED THAT THE USER OF THE SERVICES PROVIDED BY THE OWNER SHALL NOT HAVE ANY TENANCY RIGHTS. DURING THE SUBSI STENCE OF THE AGREEMENT THE EXCLUSIVE, ABSOLUTE, LEGAL, AND JUDIC IAL POSSESSION OF THE PREMISES SHALL REMAIN AND BE DEEMED TO HAVE ALWAYS BEEN REMAINED WITH THE OWNER AT ALL TIMES. THE RELEVANT CLAUSE (1 0(B) AT PAGE 15 OF THE AGREEMENT) IN THE AGREEMENTS STATES AS UNDER: NOTHING HEREIN CONTAINED SHALL BE CONSTRUED AS CRE ATING ANY RIGHT, INTEREST, EASEMENT, TENANCY, SUB-TENANCY, LI CENCE, ANY OTHER RIGHT AND/OR CLAIM OF ANY NATURE WHATSOEVER I N FAVOUR OF THE CONDUCTOR IN OR OVER THE SAID PREMISES CONSISTI NG OF (AS PER AGREEMENT) OR TRANSFER OF INTEREST THEREIN IN FAVOU R OF THE CONDUCTOR OTHER THAN THE PERMISSION. THE CONDUCTOR AGREES THAT THE OWNER HAS GIVEN THE CONDUCTOR MERELY PERMISSION TO CONDUCT THE PERMITTED BUSINESS OPERATION OF (AS PER AGREEME NT) FROM THE SAID PREMISES DURING THE SUBSTANCE OF THE AGREEMENT . 8. THE LD. CIT(A) ALSO CONSIDERED THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT PVT. LTD. (SUPRA) RE LIED UPON BY THE A.O. AND HELD, FOR THE FOLLOWING REASONS GIVEN IN PARA 2.3.1 6 AND 2.3.17 OF HIS IMPUGNED ORDER, THAT THE SAME WAS NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE: 2.3.16 THE LD A.O PLACED HEAVY RELIANCE ON THE CAS E OF SHAMBHU INVESTMENT (SUPRA) WHEREIN THE HONBLE SUPREME COUR T HELD THAT IF THE PROPERTY, WHETHER FURNISHED OR UNFURNISHED, IS LET OUT WITH THE INTENTION TO HAVE RENTAL INCOME, IT WOULD BE ASSESS ABLE AS INCOME FROM HOUSE PROPERTY. ON THE OTHER HAND, IF THE PRIMARY OBJECT IS TO EXPLOIT THE PROPERTY BY COMPLEX COMMERCIAL ACTIVITIES, TH EN INCOME FROM THE SAME SHOULD BE CONSIDERED AS BUSINESS INCOME. THIS TEST HAS BEEN LAID DOWN BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF SHAMBHU INVESTMENT (P) LTD. (SUPRA) WHICH HAS BEEN APPROVED BY THE APEX COURT (SUPRA). THE RELEVANT OBSERVATIONS OF THE HONBLE H IGH COURT ARE BEING REPRODUCED AS UNDER: ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 10 MERELY BECAUSE INCOME IS ATTACHED TO ANY IMMOVABLE PROPERTY, THAT CANNOT BE THE SOLE FACTOR FOR ASSESSMENT OF SU CH INCOME AS INCOME FROM PROPERTY. IF THE MAIN INTENTION OF THE ASSESSEE IS TO LET OUT THE PROPERTY OR ANY PORTION THEREOF THE INC OME MUST BE CONSIDERED AS RENTAL INCOME OR INCOME FROM PROPERTY WHEREAS IF THE PRIMARY OBJECT IS TO EXPLOIT THE IMMOVABLE PROP ERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES IN THAT EVENT IT MUST BE HELD AS BUSINESS INCOME. 2.3.17 THE BOMBAY HIGH COURT HIGH COURT IN THE CASE OF MOHIDDIN HOTELS REPORTED IN 284 ITR 229 (BOM), RENDERED AFTE R THE SHAMBHU INVESTMENT (P) LTD. CASE (SUPRA) OBSERVED AS UNDER: - BY CATENA OF DECISIONS THE COURTS, TIME AND AGAIN, HAVE HELD THAT WHERE THE SUBJECT-MATTER THAT IS LET OUT OR GI VEN ON LICENCE IS NOT BARE TENEMENT BUT IS A COMPLEX ONE LIKE A WE LL-FURNISHED PAYING GUEST ESTABLISHMENT OR SHEDS WITH INFRASTRUC TURAL FACILITIES, THE INCOME DERIVED THEREFROM WHICH IS N OT SEPARABLE AS INCOME FROM LETTING OUT THE BUILDING AND THE INCOME LETTING OUT FROM THE FURNITURE, PLANT AND MACHINERY, ETC., SUCH COMPOSITE INCOME SHALL NOT BE COVERED BY THE INCOME FROM HOUS E PROPERTY. THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM TH E FACTS BEFORE THE HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVEST MENT (P) LTD. (SUPRA). IN THE CASE BEFORE THE HONBLE SUPREME COU RT, THE ASSESSEE HAD LET OUT THE FURNISHED ACCOMMODATION WITHOUT ANY OTHER FACILITIES. HOWEVER, IN THE PRESENT CASE APPELLANT IS OPERATING BUSINESS CENTERS AND COMMERCIAL COMPLEXES BY PROVIDING SPACE ALONG W ITH VARIOUS SERVICES AND AMENITIES AS A BUSINESS VENTURE. 9. THE LD. CIT(A) FINALLY HELD THAT THE INTENTION O F THE ASSESSEE COMPANIES WAS TO COMMERCIALLY EXPLOIT THE PROPERTY AS UNEQUIV OCALLY ESTABLISHED FROM THE FACTS AND CIRCUMSTANCES OF THE CASE AND LETTING OUT WAS ONLY INCIDENTAL TO CARRYING ON SUCH BUSINESS. HE ACCORDINGLY HELD THAT THE OBJECT OF THE ASSESSEE COMPANIES WAS TO DEVELOP AND OPERATE FAMILY ENTERTA INMENT CENTRE CUM MALLS BY EXPLOITING THE PROPERTY AND IT WAS NOT A CASE OF MERE LETTING OUT THE PROPERTY. HE ALSO NOTED THAT THE A.O. IN THE EARLI ER YEARS HAD TREATED SIMILAR INCOME RECEIVED BY DEMERGED COMPANY VIZ. E-CITY ENT ERTAINMENT (INDIA) PVT. LTD. AS BUSINESS INCOME AND THE SAME ACTIVITY HAVIN G BEEN CONTINUED BY THE ASSESSEE COMPANIES AFTER DEMERGER, THERE WAS NO REA SON FOR THE A.O. TO TAKE A DIFFERENT STAND ON THIS ISSUE. ACCORDINGLY, THE CLA IM OF THE ASSESSEE COMPANY ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 11 TREATING THE INCOME RECEIVED FROM THE OPERATION OF MALL IN THE FORM OF RENT AND OTHER SERVICE CHARGES AS BUSINESS INCOME WAS ACCEPT ED BY THE LD. CIT(A) IN ALL THE YEARS UNDER CONSIDERATION. AGGRIEVED BY THE ORD ERS OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THESE APPEALS BEFORE THE TRIB UNAL. 10. THE LD. D.R. SUBMITTED THAT THE RENTAL INCOME R ECEIVED BY THE ASSESSEE COMPANY FROM MALLS AS WELL AS OTHER SERVICE CHARGES RECEIVED FROM THE TENANTS WERE ASSESSED TO TAX BY THE A.O. UNDER THE HEAD INCOME FROM HOUSE PROPERTY FOR THE REASONS SPECIFICALLY GIVEN IN PAR A NO. 10 TO 12 OF HIS ASSESSMENT ORDER. HE ALSO SUBMITTED THAT RELIANCE WAS PLACED BY THE A.O. ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F SHAMBHU INVESTMENT PVT. LTD. (SUPRA) IN SUPPORT OF HIS ACTION IN TREAT ING THE SAID INCOME AS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HE THEREFORE RELIED STRONGLY ON THE REASONS GIVEN BY THE A.O. IN THE ASSESSMENT ORDER AS WELL AS THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF SHAMBHU INVESTMENT PVT. LTD. (SUPRA) IN SUPPORT OF THE REVE NUES CASE THAT THE RENTAL INCOME RECEIVED FROM MALLS AS WELL AS SERVICE CHARG ES RECEIVED FROM THE TENANTS WERE RIGHTLY ASSESSED BY THE A.O. IN THE HA NDS OF THE ASSESSEE COMPANIES UNDER THE HEAD INCOME FROM HOUSE PROPERT Y AND THE LD. CIT(A) IS NOT JUSTIFIED IN TREATING THE SAME AS BUSINESS INC OME BY OVERLOOKING THE REASONS GIVEN BY THE A.O. AS WELL AS THE DECISION O F HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENT PVT. LTD. (SUPRA) 11. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT VARIOUS MALLS WERE OPERATED BY THE DEMERGED COMPANY RIGHT FROM THE FINANCIAL YEAR 2001-02 AND THE INCOME RECEIVED BY T HE SAID COMPANY FROM THE OPERATION OF THE MALL IN THE FORM OF RENT AND OTHER SERVICE CHARGES PRIOR TO DEMERGER WAS REGULARLY ASSESSED TO TAX BY THE A.O. AS BUSINESS INCOME. HE SUBMITTED THAT THE DEMERGER TOOK PLACE ON 1-4-2006 WHEREBY THE ASSETS AND LIABILITIES OF THE DEMERGED COMPANY WERE TRANSFERRE D TO THE ASSESSEE ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 12 COMPANIES AS GOING CONCERNS AND THE SAME BUSINESS A S CARRIED OUT BY THE DEMERGED COMPANY WAS CONTINUED BY THE ASSESSEE COMP ANIES. HE CONTENDED THAT THERE WAS THUS NO JUSTIFICATION IN THE ACTION OF THE A.O. TO TREAT SIMILAR INCOME EARNED BY THE ASSESSEE COMPANIES FROM THE OP ERATION OF MALLS IN THE FORM OF RENT AND OTHER SERVICE CHARGES AS INCOME FR OM HOUSE PROPERTY BY TAKING A DIFFERENT VIEW THAN THE VIEW TAKEN IN THE EARLIER YEARS IN THE CASE OF DEMERGED COMPANY ESPECIALLY WHEN THERE WAS NO CHANG E IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HE ALSO CONTENDED THAT THE ACTIVITY OF OPERATING MALLS, IN ANY CASE, WAS A BUSINESS ACTIVITY AS RIGH TLY HELD BY THE LD. CIT(A) AND THE INCOME EARNED FROM THE SAID ACTIVITY IN THE FORM OF RENT AND OTHER SERVICE CHARGES WAS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE AS BUSINESS INCOME. HE THEREFORE STRONGLY RELIED ON TH E IMPUGNED ORDERS OF THE LD. CIT(A) TREATING THE SAID INCOME AS BUSINESS INC OME AND ALSO SUBMITTED THAT THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF CIT VS. NEO POLY PACK (P.) LTD., 245 ITR 492 AS WELL AS THE DECISION OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S KHANDELWAL ESTATE P. LTD. (ITA NO. 2 692/M/2010 ORDER DTD. 7- 2-2014) FURTHER SUPPORT THE CASE OF THE ASSESSEE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED THAT B OTH THE ASSESSEE COMPANIES IN THE PRESENT CASE HAVE COME INTO EXISTENCE AS A R ESULT OF DEMERGER OF E-CITY ENTERTAINMENT (INDIA) PVT. LTD. WHICH TOOK PLACE ON 1-4-2006. PRIOR TO THE DEMERGER, THE SAID DEMERGED COMPANY WAS ALSO ENGAGE D IN THE BUSINESS OF ACQUISITION OF IMMOVABLE PROPERTIES AND CONSTRUCTIN G, DEVELOPING AND BUILDING FAMILY ENTERTAINMENT CENTRE CUM MALLS ACRO SS INDIA AND LEASING, LICENSING, RENTING AND MANAGING, OPERATING AND RUNN ING THE SAME FOR COMMERCIAL USE AFTER SETTING UP NECESSARY INFRASTRU CTURE. ACCORDINGLY, VARIOUS MALLS WERE BUILT BY THE SAID COMPANY AND TH E SAME WERE OPERATED RIGHT FROM THE YEAR 2001. THE OPERATIONAL INCOME R ECEIVED FROM THE SAID ACTIVITY IN THE FORM OF RENT AND OTHER SERVICE CHAR GES WAS CONSISTENTLY OFFERED ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 13 BY THE DEMERGED COMPANY TO TAX AS ITS BUSINESS INCO ME IN THE EARLIER YEARS UPTO 2006-07 AND AS SUBMITTED BY THE LD. COUNSEL FO R THE ASSESSEE AT THE TIME OF HEARING BEFORE US AND ALSO NOTED BY THE LD. CIT(A) IN HIS IMPUGNED ORDERS, THE SAME WAS ACCEPTED BY THE DEPARTMENT. AF TER DEMERGER, BOTH THE ASSESSEE COMPANIES TOOK OVER THE ASSETS AND LIABILI TIES OF THE DEMERGED COMPANY AND CONTINUED THE SAME BUSINESS OF OPERATIN G AND RUNNING THE MALLS. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND OURSELVES IN AGREEMENT WITH THE LD. COUNSEL FOR THE ASSESSEE THA T THE A.O. WAS NOT JUSTIFIED IN TAKING A DIFFERENT VIEW BY TREATING TH E OPERATING INCOME RECEIVED BY THE ASSESSEE COMPANIES FROM MALLS IN THE FORM OF RENT AND OTHER SERVICE CHARGES AS INCOME FROM HOUSE PROPERTY AND THE LD. C IT(A) WAS CORRECT IN TREATING THE SAME AS BUSINESS INCOME OF THE ASSESSE E COMPANIES BY FOLLOWING THE RULE OF CONSISTENCY AFTER HAVING FOUND THAT THE RE WAS NO CHANGE IN THE RELEVANT FACTS AND CIRCUMSTANCES OF THE CASE. 13. IT IS ALSO OBSERVED THAT WHILE ACCEPTING THE CL AIM OF THE ASSESSEE COMPANIES THAT OPERATIONAL INCOME IN THE FORM OF RE NT AND SERVICE CHARGES CONSTITUTED THEIR BUSINESS INCOME ON MERIT, THE LD. CIT(A) HAS CONSIDERED ALL THE JUDICIAL PRONOUNCEMENTS CITED BY THE ASSESSEE A S WELL AS RELIED UPON BY THE A.O. AND DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE BY APPLYING THE LEGAL POSITION EMANATING FROM THE SAID JUDICIAL PRONOUNCE MENTS. WHILE DOING SO, HE HAS DULY TAKEN INTO CONSIDERATION THE NATURE OF BUS INESS ACTIVITY OF THE ASSESSEE COMPANY AS WELL AS THE TERMS AND CONDITION S OF THE RELEVANT AGREEMENTS UNDER WHICH THE COMMERCIAL SPACE IN THE MALLS WAS GIVEN ON HIRE BY THE ASSESSEE COMPANIES TO THE CONCERNED PARTIES. HE HAS ALSO TAKEN INTO ACCOUNT THE VARIOUS SERVICES PROVIDED BY THE ASSESS EE COMPANIES DURING THE COURSE OF OPERATION AND RUNNING OF THE FAMILY ENTER TAINMENT CENTRE CUM MALLS OWNED BY IT IN PARA 2.3.14 OF HIS IMPUGNED ORDER TO COME TO THE CONCLUSION THAT THE INTENTION OF THE ASSESSEE COMPANIES WAS TO COMMERCIALLY EXPLOIT THE PROPERTY AND LETTING OUT WAS ONLY INCIDENTAL TO CAR RYING ON SUCH BUSINESS. ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 14 14. AS HELD BY THE HONBLE CALCUTTA HIGH COURT IN T HE CASE OF SHAMBHU INVESTMENT PVT. LTD. (2001) 249 ITR 47 (CAL.), WHIC H HAS BEEN SUBSEQUENTLY AFFIRMED BY THE HONBLE SUPREME COURT, WHAT HAS TO BE SEEN IN THIS CONTEXT IS WHAT IS THE PRIMARY OBJECT OF THE ASSESSEE WHILE EX PLOITING THE PROPERTY. IF IT IS FOUND APPLYING SUCH TEST THAT THE MAIN INTENTION IS TO LET OUT THE PROPERTY OR ANY PORTION THEREOF, THE SAME MUST BE CONSIDERED AS INCOME FROM HOUSE PROPERTY. IN CASE IT IS FOUND THAT THE VERY INTENT ION IS TO EXPLOIT THE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITY, IN THAT EVEN T IT MUST BE HELD AS BUSINESS INCOME. IN OUR OPINION, THE FACTS OF THE PRESENT CASE AS BORNE OUT FROM THE RECORD CLEARLY SHOWS THAT THE CASES OF THE ASSESSEES FALL UNDER THE LATTER CATEGORY AS THE INTENTION OF THE ASSESSEES C LEARLY WAS TO EXPLOIT THE COMMERCIAL PROPERTY BY WAY OF COMPLEX COMMERCIAL AC TIVITIES AND IT WAS NOT A CASE OF LETTING OUT THE PROPERTY OWNED BY THE ASSES SEE COMPANIES SIMPLICITER. THE RENTAL INCOME WAS NOT RECEIVED BY THE ASSESSEE COMPANIES MERELY BECAUSE OF THE OWNERSHIP OF THE PROPERTY BUT THE SA ME WAS RECEIVED BECAUSE OF THE COMPLEX COMMERCIAL ACTIVITY CARRIED ON BY TH EM OF OPERATING AND RUNNING MALLS WHICH BROUGHT THAT RENTAL INCOME. THE RENTAL INCOME AND SERVICE CHARGES THUS WERE RECEIVED BY THE ASSESSEE COMPANY AS BUSINESS INCOME DURING THE COURSE OF ITS BUSINESS CARRIED ON BY THEM OF OPERATING AND RUNNING THE MALLS AS A COMMERCIAL ACTIVITY AND AS R IGHTLY HELD BY THE LD. CIT(A), THE SAID INCOME PRIMARILY ARISING FROM THE EXPLOITATION OF COMMERCIAL ASSETS BY WAY OF COMPLEX COMMERCIAL ACTIVITY CONSTI TUTED THE BUSINESS INCOME OF THE ASSESSEE COMPANY. 15. IT IS OBSERVED THAT THE DECISION OF THE CO-ORDI NATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S KHANDELWAL ESTATE P. LTD. (SUPRA ) CITED BY THE LD. COUNSEL FOR THE ASSESSEE ALSO SUPPORTS THE CASE OF THE ASSE SSEES. IN THE SAID CASE, THE INCOME RECEIVED BY THE ASSESSE FROM THE OPERATION O F SHOPPING MALLS IN THE FORM OF RENT AND SERVICE CHARGES WAS HELD TO BE BUS INESS INCOME OF THE ITA 8390/M/10, ITA 1435, ITA 1436/M/12 & I TA 1430 15 ASSESSEE BY THE TRIBUNAL HOLDING THAT GIVING SPACE WITH SERVICES AND FACILITIES OF VARIED AND WIDE NATURE WOULD DEFINITELY CONSTITU TE A BUSINESS AND THE RELATIONSHIP BETWEEN THE PARTIES IN SUCH CASE IS DI STINGUISHED FROM THAT MERELY OF A LANDLORD AND TENANT RELATIONSHIP. WE T HEREFORE FIND NO INFIRMITY IN THE IMPUGNED ORDERS OF THE LD. CIT(A) TREATING THE OPERATIONAL INCOME RECEIVED BY THE ASSESSEE COMPANIES FROM RUNNING OF MALLS IN THE FORM OF RENT AND SERVICE CHARGES AS THEIR BUSINESS INCOME AND UPHOLD ING THE SAME ON THIS ISSUE, WE DISMISS THESE APPEALS FILED BY THE REVENU E. 16. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JULY, 2014. ' . / 0 30-7-2014 ' SD/- SD/- (H.L. KARWA) (P.M. JAGTAP ) /PRESIDENT ACCOUNTANT MEMBER MUMBAI ; 0 DATED 30=7=2014 [ .B../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT. 3. C () / THE CIT(A) CONCERNED,,, MUMBAI 4. C / CIT CONCERNED,, MUMBAI 5. F 'BBH , ( H , / DR, ITAT, MUMBAI E BENCH 6. / GUARD FILE. / BY ORDER, #F 'B //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI