TMI Blog1991 (7) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... partmental Representative were heard. 3. The assessee is a private limited company mainly engaged in the business of manufacture and sale of plastic wares. The assessee had constructed, inter alia, warehouses in its factory premises. It entered into an agreement with M/s. W.H. Deeth Pvt. Ltd. (Exporter) for providing warehousing facilities in those godowns to the exporter. The income derived by the assessee from the warehousing facilities made available to the exporter was shown by the assessee as business income. The ITO, however, treated the income as income from house property and taxed it as such. In the first appeal, the learned CIT(A) held that since the possession of the warehouses was retained by the assessee and was not parted wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are house Owners explained to the Exporters that their Thana Premises consisting of about 10,000 Sq. Ft. will be require further expenditure for completing flooring, side walls and gates, etc. to make fit for Storing the goods of the Exporters. AND WHEREAS party of the second part M/s. W.H. Deeth Pvt. Ltd. agreed to complete the incomplete construction work by way of providing the finance for completion of the remaining construction work and adjusting the same against the future storage charges. 1. The party of the first part shall allow the storage facilities to M/s. W.H. Deeth Pvt. Ltd. for storing their goods at Thana premises. 2 ........... 3. The amount spent for completion of the construction of the premises shall be consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed charges whichever is higher. 12. The goods belonging to the Exporter shall be stored at their entire risk and consequences and Warehouse Owner will not be responsible for any loss or damage or theft. However, if any loss or damage is caused due to negligence of Warehouse Owners they agree to compensate the same. 13 ........... 14 ........... 15, This Warehousing agreement shall not evolve any right, interest or title to the properties of premises belonging and possessed by the Warehouse Owner in favour of the Exporter. 16 .......... 17 .......... 18. The Warehouse Owners shall have a right to keep the goods of other parties in addition to the goods of the Exporter if unutilised space is available in the premises." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arranted by its Memorandum of Association and derives income, which is essentially and intrinsically income from business, the same cannot be taxed as income from other sources merely on the ground that the Memorandum of Association of the company does not permit it engaging in such type of business. In the instant case, we feel inclined to accept the argument of the learned representative of the assessee that this part of the activity carried on by the assessee-company is an organised business activity. Any income derived from such activity is, therefore, liable to be treated and taxed as business income and not as income from other sources. The two appeals of the assessee are thus entitled to succeed. 6. In the result, we allow these t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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