On 16.04.1991 the Assesse entered into an agreement with M/s East India Hotels Limited (now renamed as EIH Limited) to acquire under a license an area of 9,000 square feet in Hotel Oberoi Towers, Bombay (now renamed as Trident Nariman Point) for the purpose of using the same as a shopping centre.

The tenure of the said leave and license was a period of 50 years at a fixed monthly license fee as agreed between the parties.

The Assesse is Subsidiary of M/s East India Hotels Limited.

After acquiring the said shopping space, the assesse utilized it in granting different portions of the shopping space to various parties who were interested in setting up shops there with the condition that the shopkeepers had to subscribe to a specific number of shares of the assesse apart from payment of monthly charges (termed as contribution from shops).

The Assesse also provided various services to the licensees like air-conditioning, telephone services, maintenance, electricity, water, sanitary, security etc. In consideration for the same, the licensees were required to pay to the Assesse monthly consideration on the basis of the bill by the Assesse as determined by the Board of Directors from time to time.

According to the Assesse, since the assesse is basically involved in the business of providing the shopping space on license along with various services, the consideration received from the said shopping space was shown as business income in the computation of income. And also claimed the amount of license fees paid to EIH Limited expenditure against the said business income.

Date of Judgement/Order: 2nd September,2016

Court: Income Tax Tribunal “B” Bench, Kolkata

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