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| The Tax Publishers2019 TaxPub(DT) 3539 (Bom-HC) : (2020) 423 ITR 0062 : (2019) 265 TAXMAN 0308 INCOME TAX ACT, 1961
Section 14
Where assessee did not simply rent a commercial space without any additional responsibilities and executed lease and also provided range of common facilities and amenities and charges for several common amenities was included in the rentals, therefore, all these factors clearly indicated that assessee desired to enter into a business of renting out commercial space to interested individuals and business house.
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Head of income - Income from house property or business income - Activity of leasing out of shops and other commercial establishments to various persons -
Assessee-company was engaged in the business of leasing out of shop space in shopping malls and declared income received from such activity of leasing out of shops and other commercial establishments to various persons as business income. Assessee, in addition to receiving rental income had also received certain charges from the licensees such as common amenities charges, maintenance charges, advertisement charges. AO held that income was from house property and not business income. Tribunal held that the income was business income. Held: Assessee did not simply rent a commercial space without any additional responsibilities. It executed lease and license agreements and also provided range of common facilities and amenities upon which the occupiers could run their business from the leased out premises. Charges for several common amenities was included in the rentals. Only on the consumption based amenity such as electricity, occupant would be charged separately. Thus, assessee was not engaged in systematic activity of providing service to occupiers of the shops so as to constitute the receipt as business income.
REFERRED : Raj Dadarkar & Associates v. ACIT (2017) 81 Taxmann.com 193 (SC) : 2017 TaxPub(DT) 1173 (SC).
FAVOUR : In assessee's favour.
A.Y. :
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