M/S. ASSET INVESTMENT SERVICES, Thane V. ACIT-26(1), MUMBAI

ITA 331/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7598 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 24-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHTAR HANSARI
• Keywords: Business income; Depreciation; Question of law
• Section: 143(3); 22; 10; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, A CCOUNTANT M EMBER ITA NO. 331 /MUM/201 9 ( ASSESSMENT YEAR: 2013 - 14 ) M/S ASSET INVESTMENT SERVICES, SHOP NO. 11006, GROUND FLOOR, BIPASA CHS, STAR COLONY, MANPADA ROAD, DOMBIV LI EAST, THANE. VS. A.C.I.T. - 26(1) ROOM NO. 701, C - 12, 7 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI - 400051. PAN/GIR NO. AAQFA 7714 D (APPELLANT ) .. (RESPONDENT ) ITA NO. 334 & 333 /MUM/201 9 ( ASSESSMENT YEAR S : 2010 - 11 & 2011 - 12) M/S ASSET INVESTMENT SERVICES, SHOP NO. 11006, GROUND FLOOR, BIPASA CHS, STAR COLONY, MANPADA ROAD, DOMBIVLI EAST, THANE. VS. I.T.O. - 26(1)(2) ROOM NO. 701, C - 12, 7 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA EAST, MUMBAI - 400051. PAN/ GIR NO. AAQFA 7714 D (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI VIRAJ MEHTA ( A R) REVENUE BY SHRI AKHTAR H ANSARI (D R) DATE OF HEARING 22 /01/2020 DATE OF PRONOUNCEMENT 28 / 01 /20 20 / O R D E R PER: R.C. SHARMA, A.M. THESE ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF THE LD. CIT(A) - 38 , MUMBAI DATED 10/08/2018 AND 28/06/2018 FOR THE A.Y. 2013 - 14, 2010 - 11 & 2011 - 12 RESPECTIVELY IN THE MATTER OF ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 2 ORDER PASSE D U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). 2. ALL THESE APPEALS HAVE COMMON ISSUE, THEREFORE, ALL ARE CLUBBED AND HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, A COMMON ORDER IS BEING PASSED. 3. COMMON GRIEVANCE OF THE ASSES SEE IN ALL THESE YEARS RELATE TO TREATMENT OF LEASE INCOME AS INCOME FROM HOUSE PROPERTY WHICH WAS OFFERED BY THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. 4. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE FIRM IS THE OWNER OF A COMMERCIAL PROPERTY, UNIT NO. 609 AT KOHINOOR CITY MALL AT KURLA HAVING CARPET AREA OF 3082.71 SQ.MTR. EQUIVALENT TO 286 SQ.MTR ON 6 TH FLOOR WITH 4 COVERED PARKING WAS BOUGHT ON 26 TH OCTOBER, 2009 FROM M/S KOHINOOR PLAN ET CONSTRUCTION PVT. LTD. DURING THE YEAR UNDER CONSIDERATION THE RENTAL INCOME IS DECLARED UNDER THE HEAD INCOME FROM BUSINESS/PROFESSION IN THE RETURN FILED. DURING THE ASSESSMENT PROCEEDINGS THE AR OF THE ASSESSEE VIDE ORDERSHEET NOTING DATED 09/12/20 16 WAS SPECIFICALLY ASKED WHEN THE ASSESSEE IS THE OWNER OF THE PROPERTY, WHY THE RENTAL INCOME SHOULD NOT BE TREATED AS INCOME FROM HOUSE PROPERTY U/S 22 OF THE ACT AND TO SHOW CAUSE AS TO WHY AN AMOUNT OF RS. 4,16,160/ - SHOULD NOT BE TREATED AS ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 3 RENTAL IN COME AND NOT BUSINESS INCOME. THE ASSESSEE SUBMITTED COPY OF PURCHASE AGREEMENT OF THE PROPERTY AND CONTENDED VIDE LETTER DATED 19/12/2016 THAT THE ASSESSEE FIRM WAS ENGAGED IN THE BUSINESS OF RENTING THE COMMERCIAL PROPERTY DURING THE YEAR AND IN THE RETU RN FILED, THE INCOME FROM RENTING PROPERTY IS DISCLOSED UNDER THE HEAD INCOME FROM BUSINESS. THERE IS NO OTHER INCOME EARNED BY THE ASSESSEE. THE ASSET IS A COMMERCIAL ASSET AND THE INCOME RECEIVED IS ON ACCOUNT OF COMMERCIAL EXPLOITATION OF THE ASSET. THE MAIN INTENTION IS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMMERCIAL ACTIVITIES AND HENCE THE RENTAL INCOME SHOULD BE TREATED AS BUSINESS INCOME. THE A.O. POINTED OUT THAT IN THIS CASE THE ASSESSEE HAS BEEN SIMPLY LEASING THE PREMISES AND EARNING RENT AL INCOME FROM M/S CENTAURUS FINANCIAL SERVICES PVT. LTD. PROCEEDED TO TAX THE RENTAL INCOME AS INCOME FROM HOUSE PROPERTY U/S 22 OF THE ACT. 5. BY THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O., AGAINST WHICH THE ASSESSEE IS IN FURT HER APPEAL BEFORE THE ITAT. 6. I HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY THE LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS C ITED BY LD. AR AND DR DURIN G THE COURSE OF HEARING BEFORE ME , I N THE CONTEXT OF FACTUAL MATRIX OF THE CASE 7. FROM THE RECORD I FOUND THAT THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LETTING OUT PROPERTY FOR RENT AS THE BUSINESS ACTIVITY IN ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 4 ACCORDANCE WITH THE PARTNERSHIP DEED DATED 15 TH SEPTEMBER 2009. IT HAS COMMENCED BUSINESS OPERATIONS BY LEASING OUT THE PREMISES VIDE AGREEMENT DATED 26 TH NOVEMBER 2009. ASSESSEE'S MAIN BUSINESS IS TO LEASE OUT PROPERTIES AND EARN INCOME FROM THEM , THE 'MAIN OBJECT CLAUSE' OF THE PARTNERSHIP DEED READS AS FOLLOWS: 'WHEREAS ALL THE PARTIES ARE DESIROUS OF JOINING HANDS TO CARRY ON THE BUSINESS OF BUYING/SELLING/LEASING/SUB LETTING, COMMERCIAL/RESIDENTIAL PROPERTIES/OFFICES AND ANY OTHER BUSINESS AS THE PARTNERS MAY MUTUALLY DECIDE FROM TIME TO TIME, IN PARTNERSHIP, IT HAS BEEN MUTUALLY DECIDE THE TO REDUCE IT INTO WRITING THE TERMS AND CONDITIONS OF THE PARTNERSHIP. 8 . IT IS EVIDENT FROM THE MAIN OBJECT CLAUSE THAT ASSESSEE IS INTO THE BUSINESS OF LEASING PROPERTIE S. THEREBY, IN NO MANNER IT CAN BE CONCLUDED THAT ASSESSEE IS NOT IN BUSINESS ACTIVITY' OF RENTING ITS PROPERTIES. HON'BLE APEX COURT AT PAGE NOS . 772 - 773 IN THE CASE OF NARAIN SWADESHI WEAVING MILLS VS COMMISSIONER OF EXCESS PROFITS TAX IR 1955 SC 176, (1 954) 26 ITR 765 SC, 1955 1 SCR 952 STATED AS UNDER: - 'BUSINESS' AS DEFINED IN SECTION 2(5) OF THE EXCESS PROFITS TAX ACT INCLUDES AMONGST OTHERS, ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE. THE FIRS T PART OF THIS DEFINITION OF 'A BUSINESS' IN THE EXCESS PROFITS TAX ACT IS THE SAME AS THE DEFINITION OF A BUSINESS IN SECTION 2(4) OF THE INDIAN INCOME - TAX ACT. WHETHER A PARTICULAR ACTIVITY AMOUNTS TO ANY TRADE, COMMERCE OR MANUFACTURE OR ANY ADVENTURE IN THE NATURE OF TRADE, COMMERCE OR MANUFACTURE IS ALWAYS A DIFFICULT QUESTION TO ANSWER. ON THE ONE HAND IT HAS BEEN POINTED OUT BY THE JUDICIAL COMMITTEE IN COMMISSIONER OF INCOME - TAX V. SHAW WALLACE & CO. ((2932) IL.R. 59 CAT 1343), THAT THE WORDS USED IN THAT DEFINITION ARE NO DOUBT WIDE BUT UNDERLYING EACH OF THEM IS THE FUNDAMENTAL IDEA OF THE CONTINUOUS EXERCISE OF AN ACTIVITY. THE WORD 'BUSINESS' CONNOTES SOME REAL, SUBSTANTIAL AND SYSTEMATIC OR ORGANISED COURSE OF ACTIVITY OR CONDUCT WITH A SET PUR POSE. ON THE OTHERS HAND, A SINGLE AND ISOLATED TRANSACTION HAS BEEN HELD TO BE CONCEIVABLY CAPABLE OF FALLING WITHIN THE DEFINITION OF BUSINESS AS BEING AN ADVENTURE IN THE NATURE OF TRADE PROVIDED THE TRANSACTION BEARS CLEAR INDICIA OF TRADE. THE QUESTIO N, THEREFORE, WHETHER A PARTICULAR SOURCE OF INCOME IS BUSINESS OR NOT MUST BE DECIDED ACCORDING TO OUR ORDINARY NOTIONS AS TO WHAT A BUSINESS IS. THE CASE OF COMMISSIONER OF EXCESS PROFITS TAX BOMBAY CITY. SHRI LAKSHMI SILK MILLS LTD. {[1952] S.C.R. 1), DECIDED BY THIS COURT IS CLEARLY ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 5 DISTINGUISHABLE' THERE THE, RESPONDENT COMPANY WHICH WAS FORMED FOR THE PURPOSE OF MANUFACTURING SILK CLOTH INSTALLED A PLANT FOR DYING SILK YAM AS A PART OF ITS BUSINESS. DURING THE RELEVANT CHARGEABLE ACCOUNTING PERIOD, O WING TO DIFFICULTY IN OBTAINING SILK YARN ON ACCOUNT OF THE WAR, IT COULD NOT MAKE ANY USE OF THIS PLANT AND IT REMAINED IDLE FOR SOME TIME. IN AUGUST, 1943, THE PLANT WAS LET OUT TO ANOTHER COMPANY ON A MONTHLY RENT. THE QUESTION AROSE WHETHER THE INCOME RECEIVED BY THE RESPONDENT COMPANY IN THE CHARGEABLE ACCOUNTING PERIOD BY WAY OF RENT WAS INCOME FROM BUSINESS AND ASSESSABLE TO EXCESS PROFITS TAX. IT SHOULD BE NOTED THAT IN THAT CASE THE RESPONDENT COMPANY WAS CONTINUING ITS BUSINESS OF MANUFACTURING SI LK CLOTH. ONLY A PART OF ITS BUSINESS, NAMELY, THAT OF DYING SILK YAM HAD TO BE TEMPORARILY STOPPED OWING TO THE DIFFICULTY IN OBTAINING SILK YARN ON ACCOUNT OF THE WAR. IN SUCH A SITUATION, THIS COURT HELD THAT THAT PART OF THE ASSETS DID NOT CEASE TO BE COMMERCIAL ASSETS OF THAT BUSINESS SINCE IT WAS TEMPORARILY PUT TO DIFFERENT USE OR LET OUT TO ANOTHER AND ACCORDINGLY THE INCOME FROM THE ASSETS WOULD BE PROFITS OF THE BUSINESS IRRESPECTIVE OF THE MANNER IN WHICH THAT ASSET WAS EXPLOITED BY THE COMPANY. THIS COURT CLEARLY INDICATED THAT NO GENERAL PRINCIPLE COULD BE LAID DOWN WHICH WOULD BE APPLICABLE TO ALL CASES AND THAT EACH CASE MUST BE DECIDED ON ITS OWN CIRCUMSTANCES ACCORDING TO ORDINARY COMMON SENSE PRINCIPLES. IN THE CASE BEFORE US THE ASSESSES F IRM'S BUSINESS HAD ENTIRELY CLOSED. IT NO LONGER MANUFACTURED ANY RIBBONS AND LACES. IT HAD ACCORDINGLY NO FURTHER TRADING OR COMMERCIAL ACTIVITY. IT COULD NOT IN FACT USE THE PLANT, MACHINERY, ETC., AFTER THE LAND AND THE BUILDINGS WHERE THEY WERE INSTALL ED HAD BEEN SOLD TO THE COMPANY. IN THESE CIRCUMSTANCES THE ASSESSEE FIRM LET OUT THE PLANT, MACHINERY, ETC., ON AN ANNUAL RENT OF RS. 40,000. THESE FACTS ARE VERY SIMILAR TO THOSE FOUND IN JNJGND REVENUE COMMISSIONERS V. BROADWAY CAR CO. LTD. (11946] 2 A. E.R. 609). THERE THE WAR CONDITIONS HAD REDUCED THE COMPANY'S BUSINESS TO VERY SMALL PROPORTIONS. IN THAT SITUATION IT WAS OBSERVED THAT IN THAT CASE THE COMPANY DEALT WITH PART OF ITS PROPERTY WHICH HAD BECOME REDUNDANT AND WAS SUBLET PURELY TO PRODUCE IN COME - A TRANSACTION QUITE APART FROM THE ORDINARY BUSINESS ACTIVITIES OF THE COMPANY. THE RATIO DECIDENDI IN THAT CASE WHICH WAS NOTICED IN THE JUDGMENT OF THIS COURT APPEARS TO US TO APPLY TO THE FACTS FOUND IN THE PRESENT CASE APART FROM THE FINDINGS UN DER SECTION 10A. APPLYING ALSO THE COMMON SENSE PRINCIPLE TO THE FACT SO FOUND IT IS IMPOSSIBLE TO HOLD THAT THE LETTING OUT OF THE PLANT, MACHINERY, ETC., WAS AT ALL A BUSINESS OPERATION WHEN ITS NORMAL BUSINESS ACTIVITY HAD COME TO A CLOSE, TI IS INTERES TING TO NOTE THAT SUB - SECTIONS (3) AND (4) OF SECTION 12 OF THE INDIAN INCOME - TAX ACT RECOGNISE THAT LETTING OUT OF PLANT, MACHINERY, ETC., MAY BE A SOURCE OF INCOME FALLING UNDER THE HEAD ''OTHER SOURCES' WITHIN THAT SECTION AND NOT NECESSARILY UNDER THE HEAD 'BUSINESS' DEALT WITH IN SECTION 10 OF THAT ACT. IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, THEREFORE, THE LETTING OUT OF THE PLANT, MACHINERY, ETC,, CANNOT BE HELD TO FALL WITHIN THE BODY OF THE DEFINITION OF 'BUSINESS' UNDER SECTION 2(5) OF THE EX CESS PROFITS TAX ACT IN THIS VIEW OF THE MATTER IT IS NOT NECESSARY FOR US TO EXPRESS AN OPINION AS TO THE MEANING OR IMPLICATION OF THE PROVISO TO THAT DEFINITION OR RULE 4(4) OF ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 6 SCHEDULE I TO THE ACT. IN OUR OPINION, IN THE FACTS AND CIRCUMSTANCES OF THI S CASE, QUESTION NO, 3 SHOULD HAVE BEEN ANSWERED IN THE NEGATIVE. 9. IN THE CASE OF UNIVERSAL PLAST LTD. V, CIT [1999] 237 ITR 454 (SC), THE GENERAL PRINCIPLES RELATING TO INCOME FROM LEASING OUT THE ASSETS OF THE BUSINESS BY AN ASSESSEE WERE LAID DOWN A S UNDER: (I) NO PRECISE TEST CAN BE LAID DOWN TO ASCERTAIN WHETHER INCOME (REFERRED TO BY WHATEVER NOMENCLATURE, LEASE AMOUNT, RENT OR LICENCE FEE) RECEIVED BY AN ASSESSEE FROM LEASING OR LETTING OUT OF ASSETS) WOULD FALL UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION'; (II) IT IS A MIXED QUESTION OF LAW AND FACT AND HAS TO BE DETERMINED FROM THE POINT OF VIEW OF A BUSINESSMAN IN THAT BUSINESS ON THE FACTS AND IN THE CIRCUMSTANCES OF EACH CASE, INCLUDING TRUE INTERPRETATION OF THE AGREEMENT U NDER WHICH THE ASSETS ARE LET OUT; (III) WHERE ALL THE ASSETS OF THE BUSINESS ARE LET OUT, THE PERIOD FOR WHICH THE ASSETS ARE LET OUT IS A RELEVANT FACTOR TO FIND OUT WHETHER THE INTENTION OF THE ASSESSEE IS TO GO OUT OF BUSINESS ALTOGETHER OR TO COME BA CK AND RESTART THE SAME; (IV) IF ONLY A FEW OF THE BUSINESS ASSETS ARE LET OUT TEMPORARILY, WHILE THE ASSESSEE IS CARRYING ON HIS OTHER BUSINESS ACTIVITIES, THEN IT IS A CASE OF EXPLOITING THE BUSINESS ASSETS OTHERWISE THAN EMPLOYING THEM FOR HIS OWN USE FOR MAKING PROFIT FOR THAT BUSINESS; BUT IF THE BUSINESS NEVER STARTED OR HAS STARTED BUT CEASED WITH NO INTENTION TO BE RESUMED, THE ASSETS ALSO WILL CEASE TO BE BUSINESS ASSETS AND THE TRANSACTION WILL ONLY BE EXPLOITATION OF PROPERTY BY AN OWNER THEREOF . 10 . IN THE CASE OF CHENNAI PROPERTIES & INVESTMENTS LTD. V. CIT (2015) 373 ITR 673, HONBLE SUPREME COURT HELD AS UNDER: - FACT: - THE ASSESSEE - COMPANY WAS INCORPORATED WITH MAIN OBJECTIVE, AS STATED IN THE MEMORANDUM OF ASSOCIATION.) TO ACQUIRE THE PROPERTIES IN THE CITY AND TO LET OUT THOSE PROPERTIES. HELD: - THE MEMORANDUM OF ASSOCIATION OF THE APPELLANT - COMPANY WHICH IS PLACED ON RECORD MENTIONS MAIN OBJECTS AS WELL AS INCIDENTAL OR ANCILLARY OBJECTS IN CLAUSE III. (A) AND (B) RES PECTIVELY. THE MAIN OBJECT OF THE APPELLANT COMPANY IS TO ACQUIRE AND HOLD THE PROPERTIES KNOWN AS 'CHENNAI HOUSE' AND 'FIRHAUIN ESTATE' BOTH IN CHENNAI AND TO LET OUT THOSE PROPERTIES AS WELL AS MAKE ADVANCES UPON THE SECURITY OF LANDS AND BUILDINGS OR OT HER PROPERTIES OR ANY INTEREST THEREIN. WHAT WE EMPHASISE ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 7 IS THAT HOLDING THE AFORESAID PROPERTIES AND EARNING INCOME BY LETTING OUT THOSE PROPERTIES IS THE MAIN OBJECTIVE OF THE COMPANY. IT MAY FURTHER BE RECORDED THAT IN THE RETURN THAT WAS F I LED ENTIRE INCOME WHICH ACCRUED AND WAS ASSESSED IN THE SAID RETURN WAS FROM LETTING OUT OF THESE PROPERTIES. IT IS SO RECORDED AND ACCEPTED BY THE ASSESSING OFFICER HIMSELF IN HIS ORDER. (PARA 5) WE ARE CONSCIOUS OF THE AFORESAID DICTA LAID DOWN IN THE CONSTITUTION BENCH JUDGMENT IT IS FOR THIS REASON, WE HAVE, AT THE BEGINNING OF THIS JUDGMENT, STATED THE CIRCUMSTANCES OF THE PRESENT CASE FROM WHICH WE ARRIVE AT IRRESISTIBLE CONCLUSION THAT IN THIS CASE, LETTING OF THE PROPERTIES IS IN FACT IS THE BUSINESS OF THE AS SESSEE. THE ASSESSEE THEREFORE, RIGHTLY DISCLOSED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS. IT CANNOT BE TREATED AS 'INCOME FROM THE HOUSE PROPERTY'. 11 . IN THE CASE OF RAYALA CORPORATION (P) LTD. V. ACIT (2016) 386 ITR 500, HONBLE SUPREME COURT HELD AS UNDER: FACTS: - THE ASSESSEE COMPANY WAS IN THE BUSINESS OF RENTING ITS PROPERTIES AND WAS RECEIVING RENT AS ITS BUSINESS INCOME. THE ASSESSEE - COMPANY CLAIMED THAT THE SAID INCOME SHOULD BE TAXED UNDER THE HEAD 'PRO F ITS AND GAINS OF BUSINESS OR PRO FESSION' AND NOT UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'. IN THE INSTANT APPEAL BEFORE THE HIGH COURT, THE REVENUE ARGUED THAT LEASING AND LETTING OUT OF SHOPS AND PROPERTIES WAS NOT THE MAIN BUSINESS OF THE ASSESSEE - COMPANY AS PER MEMORANDUM OF ASSOCI ATION AND, THEREFORE, THE INCOME EARNED BY THE ASSESSEE - COMPANY SHOULD BE TREATED AS INCOME EARNED FROM HOUSE PROPERTY. HELD: - SUBMISSIONS MADE BY THE LEARNED COUNSEL APPEARING FOR THE REVENUE IS TO THE EFFECT THAT THE RENT SHOULD BE THE MAIN SOURCE OF I NCOME OR THE PURPOSE FOR WHICH THE COMPANY IS INCORPORATED SHOULD BE TO EARN INCOME FROM RENT, SO AS TO MAKE THE RENTAL INCOME TO BE THE INCOME TAXABLE UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION. IT IS AN ADMITTED FACT IN THE INSTANT CASE THAT THE ASSESSEE COMPANY HAS ONLY ONE BUSINESS AND THAT IS OF LEASING ITS PROPERTY AND EARNING RENT THEREFROM. THUS, EVEN ON THE FACTUAL ASPECT, WE DO NOT FIND ANY SUBSTANCE IN WHAT HAS BEEN SUBMITTED BY THE LEARNED COUNSEL APPEARING FOR THE REVENUE. THE JUDGMENT RELIED UPON BY THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SQUARELY COVERS THE FACTS OF THE CASE INVOLVED IN THE APPEALS. THE BUSINESS OF THE COMPANY IS TO LEASE ITS PROPERTY AND TO EARN RENT AND THEREFORE, THE INCOME SO EARNED SHOULD BE TREATE D AS ITS BUSINESS INCOME. IN VIEW OF THE LAW LAID DOWN BY THIS COURT IN THE CASE OF CHENNAI PROPERTIES & INVESTMENT LTD. (SUPRA) AND LOOKING AT THE FACTS OF THESE APPEALS, IN OUR OPINION, THE HIGH COURT WAS NOT CORRECT WHILE DECIDING THAT THE INCOME OF THE ASSESSEE SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY. ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 8 1 2 . APPLYING THE JUDICIAL PRONOUNCEMENTS AS STATED ABOVE TO THE FACTS OF THE INSTANT CASE, I FOUND THAT ASSESSEE WAS MAINLY IN THE BUSINESS OF LEASING OF PROPERTIES AND ITS SUBSTANTIAL INCOME WAS ALSO FROM LEASING OF PROPERTIES. THE ASSESSEE WAS CARRYING OUT ALL THE ACTIVITIES WHICH ARE RELEVANT FOR EARNING THE INCOME FOR THESE PROPERTIES BY EXTENDING VARIOUS FACILITIES. THUS, I FOUND THAT HOLDING OF SAID PROPERTIES AND EARNING INCOME BY LETTING O UT THOSE PROPERTIES IS THE MAIN OBJECTIVE OF THE ASSESSEE . THE INCOME ARISING THEREFROM IS NECESSARILY ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION AND ASSESSEE IS ELIGIBLE TO GET DEDUCTION IN RESPECT OF EXPENDITURE INCURRED FOR EARNING TH E AFORESAID INCOME AND ALSO DEPRECIATION ON THE BUSINESS ASSETS SO HELD. IT IS ALSO ADMITTED FACT THAT ASSESSEE HAS ONLY ONE BUSINESS AND THAT IS OF LEASING ITS PROPERTY AND EARNING RENT THEREFROM. THE ASSESSEE HAS CARRIED OUT VARIOUS ACTIVITIES FOR EARNIN G SUCH INCOME BY RENDERING VARIOUS SERVICES AS REQUIRED. UNDER THESE FACTS AND CIRCUMSTANCES, I CAN SAFELY CONCLUDE THAT THE MAIN INTENTION OF ASSESSEE WAS TO EXPLOIT THE IMMOVABLE PROPERTY BY WAY OF COMPLEX COMMERCIAL ACTIVITIES, THEREFORE INCOME SO EARNE D BY EXPLOITING THE PROPERTY HAS TO BE TAXED ON AS BUSINESS INCOME. 13. IN VIEW OF THE ABOVE DISCUSSION, I DO NOT FIND ANY MERIT IN THE ACTION OF AO FOR TREATING THE INCOME AS INCOME FROM HOUSE PROPERTY. THE FACTS AND CIRCUMSTANCES IN ALL THE YEARS UNDER CONSIDERATION ARE PERIMATRIA, THEREFORE, FOLLOWING THE REASONING GIVEN HEREINABOVE, I DIRECT THE AO TO ASSESS THE INCOME UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION. ITA NO. 331, 334 & 333 /MUM/2019 M/S ASSET INVESTMENT SERVICES VS ACIT/ITO 9 1 4 . IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. O RD ER PRONOUNCED IN THE OPEN COURT ON 2 8 TH JANUARY, 2020 . SD/ - (R.C.SHARMA) ACCOUNTANT MEMBER MUMBAI; DATED 28 /01/2020 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//