In Pr. Commissioner Of Income Tax, Allahabad vs. Atlantis Multiplex Pvt. Ltd, the division bench of Allahabad High Court held that, Rental Income received from letting out shops in a mall is Income from business not come under the head Income from House property.
The assessee Atlantis Multiplex is a private company and as per Articles of Association and Memorandums of Association its main object is to undertake construction, running, leasing of Multiplexes with or without commercial complex and indulge in running, distribution, making and related business of motion pictures and providing a platform for shopping of various commodities and brands under one roof and to carry on business of rent and sale.
Relying Apex Court decision in Chennai Properties and Investment Limited Vs. Commissioner of Income Tax, the Court noted that, where the assessee derives all its income from letting out of the properties and it is the main source of business of the assessee and the income so derived would be business income of the assessee. It could not be treated as income from house property.
The division bench comprising of Justice Pankaj Mithal and Justice Umesh Chandra Tripathi observed that, “according to Memorandums of Association and Articles of Association the Assessing Officer as well as the tribunal have categorically found that the main object of the business of the assessee is to construct Mall and to derive income from letting out the shops therein. Therefore, the income so derived by the assessee may be the income from house property but would ultimately be the business income and as such the Assessing Officer has not committed any error in determining the taxable income of the assessee under the head income from business”.
While dismissing the appeal, the Court also observed that, “in the present case two views were possible before the Assessing Officer and on the basis of the main objects and the nature of income derived by the Assessee, if he had taken one view of the matter, it could not have been said that it was erroneous in law or was likely to cause prejudice to the revenue so as to permit any interference in exercise of revisional jurisdiction by the Commissioner”.
Read the full text of the Judgment below.
