1998 (11) TMI 669 - AT - Income Tax

Summary

Issues: Determination of whether rents from a godown constitute business income or income from house property.

Summary:
The appeal concerns the classification of rents received for a godown as business income or income from house property. The Assessing Officer assessed the income as Property Income based on ownership, citing legal precedents. The CIT(A) upheld this decision, referencing a Supreme Court ruling. The appellant argued that the godowns were used for business purposes, providing detailed evidence of commercial activities conducted in the warehouses. The appellant cited a Gujarat High Court case and various agreements to support their claim. The appellant also referenced legal principles from the Gujarat High Court and Supreme Court decisions, emphasizing the commercial nature of the assets. The President of ITAT Mumbai reviewed additional Supreme Court decisions related to property ownership and leasing for business purposes. The President concluded that the godowns were commercial assets intended for business use, thus classifying the rent receipts as business income. Consequently, the orders of the lower authorities were set aside, and the appeal was allowed.