COMMISSIONER OF INCOME TAX Vs. CHAMUNDI INDUSTRIAL ESTATE

JUDGEMENT

(1.) This Income Tax Appeal is directed against the order dated 13.07.2007 passed by the Income Tax Appellate Tribunal, Bangalore Bench-'B' (for short 'the Tribunal'), in ITA No.302/2006, pertaining to the Assessment year 2002-2003, whereby the orders passed by the Assessing Officer dated 31.03.2005 and by the 1st Appellate Authority dated 17.02.2006 have been reversed. The Authorities below held that income received by the respondent-assessee from letting out the commercial complex can be brought to tax under the head 'income from house property' and that the maintenance charges can be brought to tax under the head 'income from other sources'. Thus, the Authorities below held that the entire income of the assessee earned from letting out the commercial complex should be brought to tax under the head 'income from house property'. These findings of the Authorities below have been reversed by the Tribunal holding that the income earned by the assessee from letting out the commercial complex should be brought to tax under the head 'income from business'.

(2.) Our attention was drawn to the judgment of this Court in COMMISSIONER OF INCOME TAX Vs. VELANKANI INFORMATION SYSTEMS (P) LTD., 2013 218 Taxman 88 , to contend that if the assessee is in the business of taking land and putting up commercial buildings thereon and letting out such buildings with all furniture as his profession or business, then notwithstanding the fact that he has constructed a building and he has also provided other facilities and even if there are two separate rental deeds, it does not fall within the heading of income from house property. The relevant observations reads thus:-

(3.) In this backdrop, we have perused the orders passed by the Authorities below and the Tribunal and we find reference to the commercial complex measuring 60,000 sq.ft., other than the Chamundi Estate, having been acquired by the assessee and they are receiving rental income therefrom. We also noticed from the record that the assessee has also made a payment to M/s.Venkateshwara Developers towards the purchase of another 45,000 sq.ft. of super built up areas to let out after getting possession thereof.