TMI Blog2009 (5) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... e' and not `income from other sources' ? (b) Whether the Income-tax Appellate Tribunal was correct in law in treating the amount of Rs. 52,80,000 received by the assessee from Total Care (India) Pvt. Ltd. as `business income' and not `income from other sources' ? (c) Whether the Income-tax Appellate Tribunal was justified in law in treating the receipt of Rs. 51,00,000 from Shivalik Tyres Limited as `business income' and not `income from other sources' ?" 2. This appeal under section 260A of the Income-tax Act, 1961 ("Act" for short) assails the concurrent findings of the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal to the effect that the rental income received by the assessee from J K Bank Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business" are wider and more beneficial than what is available under the head "Income from other sources". 4. It is always salutary to keep in sight the enunciation of the law in K.Ravindranathan Nair v. CIT [2001] 247 ITR 178 (SC) ; [2001] 1 SCC 135 to the effect that the Tribunal is the final fact finding authority and its decision can be successfully assailed before the High Court only if it is palpably perverse. Perversity has been defined as indicative of an action, opinion or conclusion which could not reasonably be arrived at. Even an incorrect conclusion would be perverse or mala fide only if it is patently deliberate. Very recently, this view finds reiteration in CIT v. Mukundray K. Shah [2007] 290 ITR 433 (SC) where their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perverse or patently unreasonable". 5. The leading case pertaining to the head under which "income from property" is to be assessed to income-tax is Sultan Brothers Pvt. Ltd. v. CIT [1964] 51 ITR 353 (SC). The assessee had constructed a building which it had fitted with fixtures and furnishings and had let it out on lease fully equipped and furnished for the purposes of running a hotel at a monthly rent of Rs. 5,950 and monthly hire of Rs. 5,000. Their Lordships noted that the object of the assessee was to acquire land and buildings and after investments either sell or let them out. It was laid down that whether a particular letting is business activity or otherwise has to be decided in the circumstances of the each case ; the determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income could not have been assessed to tax as profits and gains from business. This was also the verdict in CIT v. Super Fine Cables P. Ltd. [1985] 154 ITR 532 (Delhi). 6. This distillation of precedents must now be applied by us to the facts of the case. As has already been noted, the assessee was the owner of property in Lajpat Nagar. Specially noted was the fact that the prominent object of the assessee is "to purchase develop, take in exchange or on lease or otherwise acquire lands, houses, farm houses, buildings, sheds industrial or otherwise and other fixtures on land and buildings and to let them out on lease, rent, contract or any other agreements as may be deemed fit to or but, construct improve, sell, exchange mortgage lands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. firstly because of the location and secondly because of the large number of walk-ins since a restaurant, as well as a bar, was being run within the same building ; the businesses were complimentary to each other ; the appellant had covenanted not to open a competing business ; Total Care (India) Pvt. Ltd. relied on the expertise of the assessee with respect to display of goods; the appellant exercised control over the opening and closing of the showroom by Total Care (India) Pvt. Ltd. ; since Total Care (India) Pvt. Ltd. could not achieve desirable levels of sales, the agreement had been terminated. In its place a restaurant by the name of Gourmet Gallery had been opened. The Tribunal had also made an indepth study of the agreements a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
