TMI Blog2002 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The judgment of the court was delivered by V.S. SIRPURKAR J.- This judgment shall dispose of three appeals, they being Tax Cases Nos. 171, 172 and 173 of 2001 pertaining to the three assessment years 1989-90, 1990-91 and 1991-92, respectively. These appeals are filed by the assessee questioning the order of the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal"), whereby the Tribunal has confirmed the earlier order passed by the appellate authority as also the assessment officer. Two questions have been framed by the appellant. They are: "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the rental income derived by the assessee should be treated as 'income from property' and not 'income from business'? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in ignoring the order passed in the wealth-tax appeal, relating to the assessment year 1989-90, wherein it was held that the factory in question was a commercial asset?" Question No. 1: Learned counsel took us through the orders and it is his contention that in the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against this order of the assessment authority, wherein the only question raised was regarding the nature of income. Since the assessee failed before the Commissioner (Appeals), a further appeal came to be filed before the Appellate Tribunal, wherein again the only question raised was: "The learned Commissioner of Income-tax (Appeals) erred in law, facts and circumstances of the case in deciding that the appellant's lease rent income received from the lessees should be treated as 'income from property' and not as 'income from business' as claimed by the appellant." The Tribunal, to begin with, after considering the facts and the factual situation, came to the conclusion that the income could not be treated as business income. Initially, the Tribunal wrote a finding that the assessee-company had sold all the machinery and had also not installed any machinery to restart its business. The Tribunal also found that the leases were granted somewhere in the year 1971 and the extent of the leased out area was extended from time to time. It also came to the conclusion that there was nothing on record to suggest that the company could again take up industrial or manufacturing activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce there was no such question involved in the aforementioned decision of the Supreme Court and there being no such clause in the memorandum of association, the Supreme Court judgment was distinguishable on facts. We do not agree. In the Supreme Court decision, after considering the law laid down in CEPT v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 (SC); Narain Swadeshi Weaving Mills v. CEPT [1954] 26 ITR 765 (SC); CIT v. Calcutta National Bank Ltd. [1959] 37 ITR 171 (SC); Sultan Brothers Private Limited v. CIT [1964] 51 ITR 353 (SC); New Savan Sugar and Gur Refining CO. Ltd v. CIT [1969] 74 ITR 7 (SC) and lastly CIT v. Vikram Cotton Mills Ltd. [1988] 169 ITR 597 (SC), the Supreme Court came to the conclusion and laid down the law in the terms quoted in the Tribunal's order, reproduced by us in para. 7. It is obvious that the Supreme Court had taken into consideration Calcutta National Bank's case [1959] 37 ITR 171 (SC), where one of the objects in the memorandum of association pertained to realisation of rental income of the assessee and therefore, it was held that since the realisation of rental income was in the course of business being in prosecution of one of its objects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by the authorities below and we concur with those findings that the income was not business income. We are particularly referring to this aspect because learned counsel also argued before us that this income was held to be an income under section 22 of the Income-tax Act. Learned counsel very painstakingly took us to section 22 and tried to contend that, that section was not available or was not applicable particularly because the properties were in occupation of the assessee in pursuance of his business. We, therefore, are inclined to deal with this aspect and clarify that the authorities concerned had to only find as to whether the concerned income was business income or not. If it was not business income, it could be income from other sources--it was not the task of the income-tax authorities to find as to under which other head would that income fall. At least in this case it was not a relevant question. Be that as it may, once it is held not to be the business income, then the controversy in this appeal would come to an end. There is another reason why we are not interfering in this matter. As per the second point in the apex court judgment, the question as to whether it a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, the Tribunal was well justified in not considering that question. In the first place, learned counsel goes on to argue, a question not raised in the appeal could not be raised by way of a miscellaneous petition and that too for rectification. The rectification could only be of obvious errors of factual nature and in this case, the question of the order or its applicability not having been raised initially in the appeal memorandum, the Tribunal had committed no error in not considering the same and, therefore, the assessee could not call upon the Tribunal to consider that question in the miscellaneous petition by way of a rectification. The argument is undoubtedly correct and we concur with the same. However, even considering the question on the merits, we are of the clear opinion that an order passed in the wealth-tax proceedings would have no effect on the income-tax proceedings. The concepts of wealth-tax and income tax would have to be definitely read separately. Even assuming that this property was a commercial property, we would be bound by the Supreme Court judgment, where the Supreme Court held that even a commercial property which is exploited otherwise t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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