TMI Blog1985 (10) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... the godown on leave and licence basis against the payment of compensation. This activity of letting out the premises was carried on by the assessee company since its incorporation. It maintained a composite profit and loss account of its income from cloth business and its income from letting out of its office premises and godowns from 1959 up to the assessment year 1966-67. Up to the assessment year 1966-67, the Income-tax Officer concerned treated the income of the assessee from both the sources as its business income. The assessee incurred a loss of Rs. 2,549 in the assessment year 1961-62 which was carried forward and the loss was set off against the composite profit of the assessee for the year 1963-64 and what was left over was carried forward and was set off against its composite income of 1964-65. In respect of the assessment year 1967-68, the Income-tax Officer departed from the earlier practice and treated the income derived from letting out or granting on leave and licence basis of part of the office premises and the godown as the income of the assessee from other sources. The Appellate Assistant Commissioner upheld this decision. The assessee preferred an appeal to the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssociation to suggest that it intended to carry on the business of sub-letting business premises. In view of these circumstances and relying upon certain decisions to which we shall refer, the Tribunal came to the conclusion that the income derived by the assessee from letting out or granting on leave and licence basis of the aforesaid premises and godown was chargeable under the head " Other sources ". It is from this decision that the assessee has come by way of the aforesaid reference. The first submission of Mr. Vakil, learned counsel for the assessee, is to the effect that it was not open to the Income-tax Officer to change his stand in the assessment year 1967-68 and come to the conclusion that the income derived by the assessee from sub-letting or granting leave and licence basis in respect of the said godown or part of the office premises was income from other sources and not business income of the assessee. It was urged by him that if such change of stand was allowed to be taken, it would cause prejudice to the assessee. We are afraid it is not open to Mr. Vakil to raise this contention at all As we have already pointed out, no contention to this effect appears to have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on the facts. In fact, as the Tribunal has pointed out in paragraph 6 of its order, the facts established by the assessee were so scanty and so much against the assessee that the Tribunal was left with no option but to hold that the action of the income-tax authorities was correct. Again, the assessee did not take up this contention before the Tribunal, as we have already pointed out, with the result that there was nothing to indicate to the Tribunal as to what was the material which was taken into account by the income-tax authorities in the earlier years and whether it was different from the material which was produced by the assessee in the assessment year with which we are concerned. The judgment of the Tribunal, moreover, shows that in the present case, no prejudice was likely to be caused to the assessee by the income-tax authorities changing their stand. We must make it clear that in order to preclude the income-tax authorities from changing their stand, the prejudice likely to be caused thereby should be such that an advantage which the assessee could have got, if the income-tax authorities had taken the stand taken in the relevant assessment year right from the beginni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer held that the rent received from the letting out of the godown had to be assessed as " Income from other sources ". The Appellate Assistant Commissioner held that the rent had to be assessed as income from house property and that the annual value of the godown was Rs. 1,08,300. The Tribunal held that the income derived by the assessee by letting out the godown was to be assessed under the head " Income from house property ". It has been pointed out by the Division Bench that the heads of income enumerated in section 14 of the Income-tax Act, 1961, are mutually exclusive and each specific head covers items of income arising from the specific source. Income derived as rent from property must be computed under the specific head regardless of the fact that that property had at one time been utilised by the assessee for business purposes. Such property cannot be treated as a business asset and the rent thereof as income from business. The Division Bench took the view that although the godown at one time had been used for business purposes by the assessee, since in the relevant previous year the godown had been let out for purposes other than business, it could not be held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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