TMI Blog1988 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... '?" Anand Rubber and Plastics (P.) Ltd., Faridabad the assessee, is private limited company incorporated in the year 1963. The objects of the company included manufacture of all types of rubber goods from natural and synthetic rubber components, mattresses, pillows, sheets and solutions, etc. To carry out the objects, the assessee installed a plant for the manufacture of cycle and rickshaw tyres, rubber sheets, etc. The factory premises consisted of three portions, the main building, the front shed and the rear shed. The main building comprised an area of 12,500 sq. feet, the front shed 6,000 sq. feet and the rear shed 4,000 sq. feet. In the first few years, the assessee incurred heavy losses due to various difficulties and the quality of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the aforesaid, the Revenue came up in appeal before the Tribunal. On consideration of the matter, the Tribunal recorded the following findings: "We have heard the parties and considered the matter. We are of the view that the Department does not have a strong case and the assessee must succeed. The learned Departmental representative was not in a position to controvert the facts as stated by learned counsel for the assessee. It is not disputed that the assessee had run into heavy losses. In fact, while computing the income for the year 1973-74, the Income-tax Officer adjusted a sum of Rs. 23,537 from the brought forward losses of the earlier years and in 1974-75, the brought forward loss was Rs. 2,30,474. In 1974-75, the resultant b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier decisions was rendered by the Supreme Court in New Savan Sugar and Gur Refining Co. Ltd. v. CIT [1969] 74 ITR 7, wherein the rental income received on letting out the entire factory premises was held to be the rental income from other sources and not business income. The Delhi High Court in CIT v. Super Fine Cables P. Ltd. [1986] 154 ITR 532, had occasion to deal with this matter and, after referring to a large number of authorities, came to the following conclusion (at p. 536) : "Thus, in each case, what has to be seen is whether the asset is being exploited commercially by the letting out or whether it is being let out for the purpose of enjoying the rent. The distinction between the two is a narrow one and has to depend on certain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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