9911796707
|
Home
Issues involved:
The issue in this case revolves around whether the activity of letting out a factory building constitutes a business, affecting the assessability of income as either business income or income from property, and consequently impacting the entitlement to registration under section 185 of the Income-tax Act, 1961. Summary: The High Court of Madhya Pradesh addressed a reference made by the Income-tax Appellate Tribunal regarding the assessability of income derived from letting out a dal mill as either business income or income from property, and the consequent eligibility for registration under section 185 of the Income-tax Act, 1961. The Appellate Assistant Commissioner initially held that the assessee was engaged in a business activity by utilizing the dal mill commercially, directing the Income-tax Officer to grant registration. However, the Tribunal disagreed, concluding that leasing the dal mill did not constitute a business activity, leading to the denial of registration. The key point of contention was whether the asset being exploited, in this case, the dal mill, qualified as a commercial asset. The court referenced the case law to establish that exploiting a commercial asset for income does not necessitate personal use by the assessee, allowing for leasing as a valid business activity. The court distinguished a prior case where incidental letting out of godowns did not establish a business intent, unlike the deliberate leasing of the dal mill in the present case. Consequently, the court held that the assessee was indeed engaged in a business activity through the leasing of the dal mill, making them eligible for registration under section 185 of the Act. The court disagreed with the Tribunal's assessment, ruling in favor of the assessee and against the Revenue, thereby allowing registration. The parties were directed to bear their own costs in this reference.
|
