Income from letting out shopping malls along with other facilities was chargeable to tax as business income

DCIT v. ATC Realtors (P.) Ltd. – [2019] 108 taxmann.com 383 (Guwahati – Trib.)

The Tribunal held that mere fact that income was attached to immovable property, couldn’t be sole criteria for assessment of such income as income from house property. It was necessary to dig out further to find out what was primary object of assessee while exploiting such property.

If it was found that main intention was simply letting out of property or any portion thereof, resultant income had to be assessed as income from house property. If main intention was found to be exploitation of immovable property by way of commercial activities, then resultant income had to be held as business income.

In the instant case, assessee-company had developed shopping malls/business centres on properties owned by it and had let out same to various users by providing host of services/facilities/amenities in said malls/business centres. It could be said that basic intention of assessee was commercial exploitation of its properties by developing them as shopping malls/business centres. Therefore, income derived therefrom was to be assessed as ‘business income’ and not as ‘income from house property.