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2016 (11) TMI 1255 - PATNA HIGH COURT

2016 (11) TMI 1255 - PATNA HIGH COURT - TMI - Rental income derived from the constructed building from letting out the property - income from house property or income from business - Held that:- The income of the appellant from letting out the property of Pandooi Place at Boring Road, Patna is an income from business. See Chennai Properties and Investments Ltd. V. CIT, [2015 (5) TMI 46 - SUPREME COURT ] and Rayala Corporation Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, [2016 (8) TMI 522 .....

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ch, Patna in I.T.A. No.369/Pat of 2004 for the assessment year 1998-99. 2. The appellant is an assessee, who has constructed a commercial complex in the name and style of Pandooi Place at Boring Road, Patna. The assessee is drawing rental income from the same. The construction of this property was started relevant to assessment year 1990-91, but after completion of the building, no return was filed for the assessment year 1994-95 when assessment proceedings were initiated under Section 147 of th .....

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e Corporation P. Ltd. V. Commissioner of Income-Tax, Calcutta, [1972] 83 I.T.R. 700 and East India Housing and Land Development Trust Ltd. v. Commissioner of Income-tax, West Bengal, [1961] 42 ITR 49 to hold the rental income as the income from house property. The further appeal before the Tribunal remained unsuccessful and still further; the assessee is in appeal before this Court. 4. In the present appeal, the following substantial question of law was framed on 29th January, 2015: Whether in t .....

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n a case of an assessee drawing rental income from a building constructed for earning income is an income from the business and not an income from the house property. It is also pointed out that the judgment in the case of East India Housing and Land Development Trust Ltd. (supra) and Constitution Bench judgment in Sultan Brothers (P) Ltd. V. Commission of Income Tax, [1964] 51 ITR 353 were considered by the Hon ble Supreme Court in Chennai Properties and Invest Ltd. (supra) and it was held that .....

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ultan Bros. (P) Ltd s case, Constitution Bench judgment of this Court has clarified that merely an entry in the object clause showing a particular object would not be the determinative factor to arrive at the conclusion whether the income is to be treated as income from business and such a question would depend upon the circumstances of each case viz. whether a particular business is letting or not. This is so stated in the following words: We think each case has to be looked at from a businessm .....

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e find nothing in the cases referred, to support the proposition that certain assets are commercial assets in their very nature. 11. We are conscious of the aforesaid dicta laid down in the Constitution Bench judgment. It is for this reason, we have, at the beginning of this judgment, stated the circumstances of the present case from which we arrive at the irresistible conclusion that in this case, letting of the properties is in fact is the business of the assessee. The assessee therefore, righ .....

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