Income from Running and Operation of a Mall and Service Charges are ‘Business Income’: ITAT Mumbai [Read Order]

In M/s. West Pioneer Properties (India) Pvt. Ltd. Vs. DCIT, the income earned by the assessee from running and operation of a Mall and service charges are liable to be treated as income from profits and gains of business and not under the head “income from House Property.”

The assessee approached the Appellate Tribunal challenging the orders of the lower authorities, wherein the property lease income of the assessee was charged to income tax under the head “income from House property” instead of “Profit and gains of Business and Profession.”Based on various judicial decisions, it was contended that the assessee has not merely let out part of its premises, but also provides a host of other complex services and the revenue received by the assessee therefrom is derived from commercial exploitation of its premises and therefore the above receipt constitutes business income as declared by the assessee.

Allowing the contentions of theassessee, the bench noted that the issue of whether or not the income earned by the assessee from leasing out of its property and for offering a host of other complex services is to be construed as commercial exploitation of its properties as stated in its objects.

It was further noted that the Co-ordinate bench of the Tribunal had allowed the appeal of the assessee based on the the ratio of the decision of the Hon’ble Apex Court in Chennai Properties & Investments Ltd. vs. CIT.

Read the full text of the order below.