Sarang v. Kotwal, Jj

Priya Soparkar 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.216 OF 2017 The Pr. Commissioner of Income Tax-6, Pune. … Appellant V/s. M/s Krome Planet Interiors Pvt. Ltd.… Respondent --- Mr.Suresh Kumar for the Appellant.--- CORAM : AKIL KURESHI AND SARANG V. KOTWAL, JJ. DATE : APRIL 22, 2019. P.C.:- 1.Revenue has filed this appeal against the judgment of theIncome Tax Appellate Tribunal. Following question is presentedfor our consideration:- “Whether on the facts and in the circumstances ofthe case and in law, the Income Tax AppellateTribunal erred in treating the House PropertyIncome as Business Income?” 2. Learned counsel for the revenue brought to our notice thefact that the identical question came up before this Court in Income Tax Appeal No.282 of 2017. The appeal was dismissedmaking following observations:- “4. We find that the conclusions of the tribunalare perfectly valid and legal. Whether theassessee’s income from immovable property isincome derived from business or from houseproperty is always a mixed question of law andfacts. The answer has to be gathered from rangeof facts and attendance circumstances. In thepresent case, the significant features are that theassessee had obtained loan from the bank for itsmall-complex project. That the assessee hadentered into lease and license agreement withindividuals for letting out commercial space.Majority of these licensees was for a period of60 months. In addition to providing suchcommercial space on lease, the assessee alsoprovided range of common amenities. List ofwhich is reproduced earlier. These facilitiesincluded installation of elevators, installationfor Fire Hydrant & Sprinkler system, installationof central garbage collections and disposalsystem, installation of common diningarrangement for occupants and the staff,common water purifier and dispensing system,lighting arrangement for common areas etc. 5. In plain terms thus, the assessee did notsimply rent a commercial space without anyadditional responsibilities. The assesseeexecuted lease and license agreements and alsoprovided range of common facilities andamenities upon which the occupiers could runtheir business from the leased out premises. Thecharges for such amenities were also brokendown in two parts. Charges for several commonamenities was included in the rentals. Only onthe consumption based amenity such as electricity, the occupant would be chargedseparately. 6. All factors thus clearly indicate that assesseedesired to enter into a business of renting outcommercial space to interested individuals andbusiness houses. The revenue however stronglyrelied on the decision of Supreme Court in caseof Raj Dadarkar & Associates Vs. AssistantCommissioner of Income-tax, reported in(2017) 81 taxmann.com 193. It was howevercase in which on facts the Supreme Court heldthat the assessee was not engaged in systematicactivity of providing service to occupiers of theshops so as to constitute the receipt as businessincome. 7. In the result the Income Tax Appeal isdismissed.” 3.In the result, this appeal is dismissed. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.) ….