TMI Blog2014 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... ut for the letting out of the machinery, plant or furniture along with such building and therefore, the rental received for the building had to be assessed under the head "Income from other sources" - where the owner of the property exploited the property by leasing out the same and realised income by way of rent, the same was to be assessed under the head "Income from house property" and not as "business income" – the order of the Tribunal is upheld – decided against assessee. - Tax Case (Appeal) Nos.815 to 818 of 2014 - - - Dated:- 11-11-2014 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. Sriram JUDGMENT (Delivered by R. Sudhakar,J.) The above Tax Case (Appeals) are filed by the assessee as against the order of the Income Tax Appellate Tribunal raising the following substantial questions of law: 1. Whether the Appellate Tribunal is correct in law in holding that the income derived by the appellant from leasing of the 'commercial properties'is not business income while assessing such income under the head 'income from house property' on the wrong reading of the facts available on record in relation thereto establishing perversity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Commissioner of Income Tax (Appeals), the assessee preferred further appeals before the Income Tax Appellate Tribunal. The Tribunal after hearing both sides, following the decision rendered by this Court in the assessee's own case for the assessment year 2001-02 reported in 300 ITR 118 dismissed the appeals holding that there is no change in the facts and circumstances of the assessment years under consideration. 4. Aggrieved by the order of the Income Tax Appellate Tribunal, the present Tax Case (Appeals) have been filed. 5. We have heard learned counsel appearing for the appellant and perused the materials placed before this Court. 6. It is seen from the order of assessment that the assessee had given its premises for rent and did not engage in any business activity at all. Under such circumstances, the Assessing Officer computed the income under the head 'income from house property'. There are no materials placed before us by the assessee to contradict the above said facts. 7. Though a plea is taken by the learned counsel appearing for the appellant that the earlier decision of this Court in respect of the assessee's own case reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from the stalls is occupation of the stalls, and it is a matter of little moment that the occupation which is the source of the income is temporary. The IT authorities were, in our judgment, right in holding that the income received by the appellant was assessable under S.9 of the IT Act. 9. In the decision reported in 266 ITR 685 (Mad) (Commissioner of Income Tax Vs. Chennai Properties and Investments Ltd), this Court elaborately considered the decisions of the Apex Court as well as this Court and pointed out that the question as to whether letting out of the property results in business income or income from property is to be decided based on the facts of each case. Pointing out to the decision in the case of East India Housing (1961) 42 ITR 49 (SC) as well as in the case of Karanpura Development Co.Ltd Vs. CIT reported in (1962) 44 ITR 362(SC) and Sultan Brothers (1964) 51 ITR 353 (SC), and the reasoning in the decision reported in 42 ITR 49 (East India Housing and Land Development Trust Ltd., Vs. CIT), this Court further held that income from letting out of the property, even in case of company carrying on business in real estate as well as having rental income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out ; (3) where all the assets of the business are let out, the period for which the assets are let out is a relevant factor to find out whether the intention of the assessee is to go out of business altogether or to come back and restart the same ; (4) if only a few of the business assets are let out temporarily, while the assessee is carrying out his other business activities, then it is a case of exploiting the business assets otherwise than employing them for his own use for making profit for that business ; but if the business never started or has started but ceased with no intention to be resumed, the assets also will cease to be business assets and the transaction will only be exploitation of property by an owner thereof, but not exploitation of business assets. 12. We have already referred to the decision of the Apex Court in East India Housing and Land Development Trust Ltd Vs. Commissioner of Income Tax reported in (1961) 42 ITR 49 (SC), which was also considered in the case of (1)Universal Plast Ltd., (2) Guntur Merchants Cottpn Press Co.Ltd Vs. CIT reported in 237 ITR 454. The question involved therein was as to whether income from letting of the property was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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