Receipts From Leasing Educational Infrastructure Taxable as Business Income | ITAT

Case Details: Deputy Commissioner of Income-tax vs. Nord Anglia Education Infrastructure (P.) Ltd. [2025] 181 taxmann.com 240 (Visakhapatnam - Trib.)

Judiciary and Counsel Details

• Ravish Sood, Judicial Member
• Balakrishnan S., Accountant Member
• Karnjot Singh Khurana, Snehal Rajan Shukla & Avar Lamba, Advs. for the Appellant.
• Badicala Yadagiri, CIT-DR for the Respondent.

Facts of the Case

The assessee-company was engaged in the business of providing land, buildings, and other infrastructure to educational institutions. For relevant assessment years, it filed its returns disclosing receipts from leasing its buildings to associate educational societies, offering receipts as business income.
However, the Assessing Officer assessed receipts under the head ‘Income from house property’. CIT(A) held in favour of the assessee. The matter reached before the Tribunal.

ITAT Held

The Tribunal ruled that the assessee constructed a custom-built educational infrastructure with a built-up area as required by the lessee-educational society and entered into lease agreements for land and buildings along with multiple service agreements such as housekeeping, security, transport management, playground and sports-facility maintenance, and CCTV monitoring.
Since assessee was engaged in complex commercial exploitation of large-scale educational infrastructure along with multi-facet associated services, and was not a passive landlord, subject receipts from its said multi-facet activities clearly fell within the meaning of “business receipts” and could not be assessed as its income under the head “Income from house property”.

List of Cases Reviewed I

• Shambhu Investment (P.) Ltd. v. CIT [2003] 129 Taxman 70/263 ITR 143 (para 38) distinguished

List of Cases Reviewed II

• Dy. CIT v. Zelan Projects (P.) Ltd. [IT Appeal No. 946/Hyd/2012, dated 12-6-2015]
• ITO v. Tejmalbhai & Co. [2006] 99 ITD 399 (Rajkot)
• Dy. CIT v. Tewari Warehousing Co. [2018] 92 taxmann.com 168/170 ITD 339 (Kolkata-Trib.) (para 42)
• Radhasoami Satsang v. CIT [1992] 60 Taxman 248/193 ITR 321 (SC) (para 43)
• Pr. CIT v. McDonald’s India (P.) Ltd. [2019] 101 taxmann.com 86 (Delhi)/ITA No. 725/2018, dated 22.10.2018
• Cheminvest Ltd. v. CIT [2015] 61 taxmann.com 118/234 Taxman 761/378 ITR 33 (Delhi)
• CIT v. Holcim India (P.) Ltd. [2015] 57 taxmann.com 28 (Delhi)
• Joint Investments (P.) Ltd. v. CIT [2015] 59 taxmann.com 295/233 Taxman 117/372 ITR 694 (Delhi)
• CIT v. Taikisha Engineering India Ltd. [2015] 54 taxmann.com 109/229 Taxman 143/370 ITR 338 (Delhi)
• Pr. CIT v. Caraf Builders & Constructions (P.) Ltd. [2019] 101 taxmann.com 167/261 Taxman 47/414 ITR 122 (Delhi)
• Maxopp Investment Ltd. v. CIT [2018] 91 taxmann.com 154/254 Taxman 325/402 ITR 640 (SC)
• Pr. CIT v. Envestor Ventures Ltd. [2021] 123 taxmann.com 378/278 Taxman 377/431 ITR 221 (Madras)
• CIT v. Tidel Park Ltd. [Tax Case No. 732 & 733 of 2018, dated 07.07.2020]
• Pragathi Krishna Gramin Bank v. Jt. CIT [2018] 95 taxmann.com 41/256 Taxman 349 (Karnataka) (para 45) followed

List of Cases Referred to

• CIT v. Chennai Properties & Investments Ltd. [2004] 136 Taxman 202/266 ITR 685 (Madras) (para 5)
• Shambhu Investment (P.) Ltd. v. CIT [2003] 129 Taxman 70/263 ITR 143 (SC) (para 5)
• East India Housing and Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC) (para 24)
• CIT v. National Storage (P.) Ltd. [1967] 66 ITR 596 (SC) (para 24)
• S.G. Mercantile Corporation (P.) Ltd. v. CIT [1972] 83 ITR 700 (SC) (para 24)
• ITO v. Tejmalbhai & Co. [2006] 99 ITD 399 (Rajkot) (para 24)
• Dy. CIT v. Tewari Warehousing Co. [2018] 92 taxmann.com 168/170 ITD 339 (Kolkata – Trib.) (para 24)
• ITO (OSD) v. RR Industries Ltd. [2012] 21 taxmann.com 448/51 SOT 175 (Chennai) (para 24)
• CIT v. Velankani Information Systems (P.) Ltd. [2013] 35 taxmann.com 1/218 Taxman 88 (Karnataka) (para 24)
• Chennai Properties & Investments Ltd. v. CIT [2015] 56 taxmann.com 456/231 Taxman 336/373 ITR 673 (SC) (para 24)
• Dy. CIT v. Zelan Projects (P.) Ltd. [IT Appeal No. 946/Hyd/2012, dated 12-6-2015] (para 24)
• Radhasoami Satsang v. CIT [1992] 60 Taxman 248/193 ITR 321 (SC) (para 25)
• Sultan Brothers (P.) Ltd. v. CIT [1964] 51 ITR 353 (SC) (para 37)
• Rayala Corporation (P.) Ltd. v. Asstt. CIT [2016] 72 taxmann.com 149/386 ITR 500/243 Taxman 360 (SC) (para 37)
• CIT v. Oberon Edifices & Estates (P.) Ltd. [2019] 103 taxmann.com 413/263 Taxman 377 (Kerala) (para 37)
• CIT v. Holcim India (P.) Ltd. [2015] 57 taxmann.com 28 (Delhi) (para 45)
• Pr. CIT v. Caraf Builders & Constructions (P.) Ltd. [2019] 112 taxmann.com 322/[2020] 268 Taxman 317 (SC) (para 45)
• Pragathi Krishna Gramin Bank v. Jt. CIT [2018] 95 taxmann.com 41/256 Taxman 349 (Karnataka) (para 45)
• CIT v. Taikisha Engineering India Ltd. [2015] 54 taxmann.com 109/229 Taxman 143/370 ITR 338 (Delhi) (para 45)
• Joint Investments (P.) Ltd. v. CIT [2015] 59 taxmann.com 295 /233 Taxman 117/372 ITR 694 (Delhi) (para 45)
• Cheminvest Ltd. v. CIT [2015] 61 taxmann.com 118/234 Taxman 761/378 ITR 33 (Delhi) (para 45)
• Pr. CIT v. McDonald’s India (P.) Ltd. [2019] 101 taxmann.com 86 (Delhi) (para 45)
• CIT v. Tidel Park Ltd. [Tax Case No. 732 & 733 of 2018, dated 07.07.2020] (para 45).