TMI Blog1986 (7) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, the Tribunal has referred the following question: " Whether the Tribunal was right in law in holding that the income derived by the company was assessable under the head 'Property' ? " The facts are simple and lie in a narrow compass. The assessee is private limited company. The company has taken on lease a site on December 6, 1973, on payment of stipulated rent for a period of 30 years. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellate Assistant Commissioner. On further appeal, the Tribunal considered the various decisions of other High Courts and also perused the terms of the lease as between the assessee and the tenant and came to the conclusion that since the subject-matter of the lease was the land and not the constructed property, the assessee became the owner of the building put up on the land for a period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inducted by the assessee cannot, therefore, be considered as business income so long as the assessee remained the owner thereof. A similar question came up for consideration before the Supreme Court in S. G. Mercantile Corporation P. Ltd. v. CIT [1972] 83 ITR 700. The assessee therein was also a private limited company. The objects of that company as per the memorandum of association were, among ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence if the assessee was company which had been incorporated with the object of buying and developing landed properties and promoting and setting up markets thereon." It would be clear from the above observation that the purpose for which the company was incorporated or the terms with which the memorandum of association has been couched are not relevant for the purpose of determining the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the lessee (assessee), the income derived from the property will have to be assessed as income from the " property " and not that of a " business ". Counsel for the assessee, however, invited our attention to the recent judgment of the Madras High Court in CIT v. Admiralty Flats Motel [1982] 133 ITR 895 in which a contrary view has been taken. We have perused the decision, but we do not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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