TMI Blog2011 (3) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent. JUDGMENT Bhaskar Bhattacharya, J. This appeal under section 260A of the Income-tax Act, 1961 is at the instance of the revenue and is directed against an order dated 10-8-2000, passed by the Income-tax Appellate Tribunal, "D" Bench, Calcutta, in ITA No. 2659 (Cal.) of 1994 relating to the assessment year 1991-92 thereby dismissing the appeal preferred by the revenue against an order passed by the Commissioner of Income-tax (Appeals). 2. The facts giving rise to filing of this appeal may be summed up thus : (a) The assessee is a charitable trust and society and was enjoying exemption in the earlier assessment years. While making assessment for the relevant assessment year, the Assessing Officer was of the view that as the assessee was earning rent from the properties which were not owned by it, the said exercise done by the assessee for earning income is not incidental to the attainment of the object of the trust and accordingly, the said rental income received by the assessee was assessed as income from business by applying the provisions of section 11(4A) of the Income-tax Act, 1961. (b) Being dissatisfied, the assessee preferred an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (1) of sub-section (2) or sub-section (3) or sub-section (3A) shall not apply in relation to any income, being profits and gains of business, unless (a) the business is carried on by a trust wholly for public religious purposes and the business consists of printing and publication of books or publication of books or is of a kind notified by the Central Government in this behalf in the Official Gazette; or (b) the business is carried on by institution wholly for charitable purpose and the work in connection with the business is mainly carried on by the beneficiaries of the institution and separate books of account are maintained by the trust or institution in respect of such business." Therefore, the first and foremost condition for applicability of the aforesaid provision is that the income of the trust must arise from business. In the case before us, the Respondent was holding a tenancy right in the property belonging to some other person and by sub-letting the same, the appellant earned some income. 7. According to section 2(13) of the Act, the word business has been defined as under : "'Business' includes any trade, commerce or manufacture or any advent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nements, hereditaments or heritages. They are the proceeds of a concern in the nature of a trade which is carried on by the Governors, and consists in finding tenants and having the rooms so equipped as to be suitable for letting." 10. Therefore, the true test is whether it is a simple letting out of the building or something more than letting out by bringing the case within the meaning of "carrying on any adventure or concern in the nature of trade or commerce." The above test has been approved by the Supreme Court in the case of CIT v. National Storage (P.) Ltd. AIR 1968 SC 70. 10A. In the above case of National Storage (P.) Ltd., (supra) the assessee-company was formed with the object of carrying on the business of storing films. It purchased certain lands and constructed safe deposit vaults in conformity with the specifications laid down in the Cinematograph Film Rules, 1948, for hiring out. The key to each vault was retained by the vault-holder, but the key to the entrance which permitted access to the vaults was kept in the exclusive possession of the assessee. The assessee also rendered other services to the vault-holders. In such a fact, it was held that the agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different conclusion. 14. Although Mr. Agarwal, the learned counsel appearing on behalf of the appellant, tried to impress upon us by relying upon the Division Bench decision of this Court in the case of Amal Kumar Chakraborty v. CIT [1994] 207 ITR 376/[1995] 78 Taxman 302 that the principle of res judicata does not apply to Income-tax proceedings for a different assessment year, having regard to our finding indicated above, we hold that apart from the question of giving relief in the past, the materials on record did not bring the mere act of sub-letting with nothing more within the term "business" so as to attract the then provision of section 11(4A) of the Act even for the relevant assessment year. 15. Regarding the applicability of the doctrine of res judicata, the following observations of a Three-Judge-Bench of the Supreme Court in the case of Joint Family of Udayan Chinubhai v. CIT AIR 1967 SC 762 lays down the law on the subject : "It is true that an assessment year under the Income-tax Act is a self-contained assessment period and a decision in the assessment year does not ordinarily operate as res judicata in respect of the matter decided in any subsequent year, for ..... 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