TMI Blog1996 (2) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... g the accounting year in question, a part of its own weaving shed was parted with to the Civil Supplies Corporation for storage of rice on a rental of Rs. 77,700 in the context. The Income-tax Officer by an order (annexure "A") dated March 2, 1987, completed the assessment accepting the said amount of income of Rs. 77,700 as income derived from letting, out the building under the head "Business income". This completed assessment under the provisions of section 263 of the Income-tax Act, 1961, was opened by the Commissioner of Income-tax by order (annexure "B" ), directing the Income-tax Officer to assess the amount in question not as "business income", but as "income from house property". It is observed in the process of reasoning that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal on the decision reported in CIT v. Ajmera Industries Pvt. Ltd. [1976] 103 ITR 245 (Cal) as well as : the decision of the Supreme Court in National Storage Pvt. Ltd.'s case [1967] 66 ITR 596. We have heard learned counsel in extenso and with regard to the question as to whether the income under consideration would have to be understood as "income from house property" or as "income from business", consistently three decisions of the Supreme Court in CEPT v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 ; East India Housing and Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 and CIT v. National Storage Pvt. Ltd. [1967] 66 ITR 596 provide the necessary declaration of law in the context. The principles that flow in regard to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered for decision depending on the peculiarities of the circumstances in regard thereto. A warning is also required to be borne in mind that decisions of foreign courts are not to be considered readily helpful to answer peculiar problems under the Indian conditions. If an assessee derives income from a commercial asset, which is capable of being used as a commercial asset, either uses it himself or lets it out to somebody else to be used, the character or the source of the asset question cannot be understood to lose its original character and source, by reason of a temporary switch over. So long as the commercial asset is capable of being exploited as such, it has to be understood that its income is "business income" and has no ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he above position emerging from the decisions of the Supreme Court, there is re-emphasis in yet another decision of the Supreme Court in Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 declaring specifically that ownership of property and its leasing, if done as a part of business, or whether purely as a transfer by the land owner, determination as to under what head the income in question would fall, the answer must necessarily depend upon the object with which the act is done. It is observed that it is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another person on rent. If this is the situation, it is amplified, what happens is that it is required to be considered a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
