2018 (9) TMI 1089 - AT - Income Tax

Treating the income from warehousing structure - income from business OR income from house property - Held that - As decided in assessee s own case for the A.Ys 2000-01 to 2005- 06 and 2008-09 referring to the case of RB Jodhamal Kuthalia 1971 (9) TMI 2 - SUPREME COURT income derived from warehousing charges are income from business . The ld. DR did not controvert the above submissions and placed no order contrary to the said order of ITAT, Kolkata. - Decided against revenue

Summary

Issues:
1. Determination of income from warehousing structure as income from business or income from house property.

Analysis:
The judgment by Appellate Tribunal ITAT Kolkata involved a dispute regarding the categorization of income derived from a warehousing structure as either income from business or income from house property for the assessment year 2013-14. The primary issue to be decided was whether the Commissioner of Income Tax (Appeals) was justified in treating the income from the warehousing structure as income from business, contrary to the initial assessment by the Assessing Officer who considered it as income from house property.

Upon reviewing the case, the Tribunal found that the Commissioner of Income Tax (Appeals) had relied on previous decisions by the Co-ordinate Bench, ITAT Kolkata, in the assessee's own case for various assessment years. The Tribunal noted that the CIT-A had discussed the issue in detail and concluded that income from warehousing charges should be classified as 'income from business' based on the legal provisions and precedents cited. The Tribunal specifically referenced the provisions of section 22 of the Income Tax Act, which state that income from property owned by the assessee is chargeable to income tax under the head 'Income from house property,' emphasizing the ownership aspect in determining the nature of income.

Moreover, the Tribunal highlighted the decision of the Hon'ble Supreme Court in RB Jodhamal Kuthalia Vs. CIT, emphasizing that the owner of the property must have the rights of ownership in their own right. The Tribunal also referenced decisions from its Bombay and Hyderabad Benches, indicating that income from letting out a property should be assessed under 'Business' or 'income from other sources' based on the ownership status and the nature of the rental activity.

Based on the analysis of legal provisions, judicial pronouncements, and precedents, the Tribunal concluded that the appellant was not the owner of the property in question and therefore the income derived from the warehousing structure should be considered as 'income from business' rather than 'income from house property.' The Tribunal upheld the decision of the CIT-A, dismissing the appeal raised by the revenue on the grounds of the ownership status and the nature of the income generated from the warehousing structure.

In conclusion, the Tribunal dismissed the appeal of the revenue, affirming the decision of the CIT-A to categorize the income from the warehousing structure as 'income from business.' The judgment provided a detailed analysis of the legal provisions, judicial decisions, and factual circumstances to support the classification of income and emphasized the significance of ownership rights in determining the nature of income for tax assessment purposes.