2009 (9) TMI 1 - HC - Income Tax

Rental Income Income from house property versus income form business - business of the assessee which was running the flour mill in question has not been closed and certain surplus godowns was let out Held that - the income from letting out would be clearly fall under the head income from business and consequently, the assessee is entitled for deduction under Section 32AB of the Act as also the depreciation of warehouse and repair expenses

Summary

The High Court of Allahabad, in a judgment from 2009, reviewed an appeal under Section 260-A of the Income Tax Act, 1961. The case involved the treatment of rental income from letting out warehouses as business income, and the eligibility for deductions under Section 32AB of the Act, depreciation, and repair expenses. The appeal related to the assessment year 1989-90. The assessee, operating a flour mill, let out some godowns during the relevant year. The Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals) had ruled in favor of the assessee, allowing the deductions. The court noted that the flour mill business was still operational and that the letting out of surplus godowns did not signify the closure of the business. Therefore, the income from letting out the godowns was deemed as business income, entitling the assessee to the deductions claimed. The court dismissed the appeal, upholding the decisions of the lower authorities. The judgment was delivered by Hon'ble R.K. Agrawal and Hon'ble Shashi Kant Gupta. The petitioner's counsels were A.N. Mahajan, A. Kumar, B. Agarwal, D. Awasthi, G. Krishna, R.K. Upadhyay, and S. Chopra, while the respondent's counsels were S.O.P. Agarwal and Rohit Agarwal.