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TMI Blog2011 (9) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... s simplicitor, but were plants, machinery, godown, etc. and in those circumstances it could be reasonably argued that income by exploiting those stock-in-trade would come under the purview of income from business - the unsold flats being house property, pure and simple and having fallen under the head, income from house property, as provided in section 22 of the Act, in our opinion, Commissioner of Income-tax (Appeals) rightly held that the rental income of such property should be assessed under section 22 of the Act - Decided in favor of the assessee - ITA No. 242 of 2003 - - - Dated:- 13-9-2011 - Bhaskar Bhattacharya, Sambuddha Chakrabarti, JJ. J.P. Khaitan, Sr. Adv., with S. Das, Sanjukta Bose and C.S. Das, Adv., for the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,122/- being the 1/5th on account of repair from annual letting out value of Rs.49,00,612/-. The Assessing Officer pointed out that in the wealth tax proceedings the assessee had taken the plea that the unsold flats as shown in stock-in-trade were not assets for the purpose of Wealth Tax Act and, hence, not taxable under the said Act. The Assessing Officer took note of the fact that the Tribunal accepted the aforesaid contention in the appeal under the Wealth Tax Act and was, therefore, of the view that since the assessee had been treating the unsold flats as stock-in-trade of its business, the income from such business assets in the nature of stock-in-trade should be treated as business income and not income from house property, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse property" and that the appellant was not entitled to the statutory deduction for repairs and collection under section 24(1)(i) of the Act. ii) Whether on a true and proper interpretation of sections 14 and 22 of the Income Tax Act, 1061 the rental income derived by the appellant from letting out the flats owned by it had to be classified and computed under the specific head "income from house property" Mr. Khaitan, learned Senior Advocate appearing on behalf of the appellant has, by placing strong reliance upon the decision of the Supreme Court in the case of East India Housing and Land Development Trust Ltd. vs. Commissioner of Income-Tax, West Bengal (1961) 42 ITR 49 has submitted before us that the distinct heads specified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Commissioner of Income-tax (Appeals). Mr. Nizamuddin, learned advocate appearing on behalf of the Revenue has, on the other hand, opposed the aforesaid contention of Mr. Khaitan and has relied upon the decision of the Supreme Court in the case of Karanpura Development Co. Ltd. vs. Commissioner of Income-Tax, West Bengal reported in (1962) 44 ITR 362 in support of his contention that the property, though dealt with by the assessee intending to do business was, in fact, dealt with as owner. According to Mr. Nizamuddin, where an assessee has acquired property which he sells with a view to acquiring other property to be dealt with in the same manner, the assessee is, in fact, not treating them as properties to be enjoyed in the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted the reasoning assigned by the Tribunal if the subject matter of stock-in-trade was not unsold flats simplicitor, but were plants, machinery, godown, etc. and in those circumstances it could be reasonably argued that income by exploiting those stock-in-trade would come under the purview of income from business. Even in the decision of the Gujarat High Court relied upon by Mr. Nizamuddin and the Tribunal below, in paragraph (iii) at page 247 of the Report, it was pointed out that what was to be seen was whether the asset was being exploited commercially by the letting out or whether it was being let out for the purpose of enjoying the rent. According to the said decision, the distinction between the two is a narrow one and has to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in our opinion, Commissioner of Income-tax (Appeals) rightly held that the rental income of such property should be assessed under section 22 of the Act. We cannot lose sight of the fact that under the Act, the income of an assessee is one and various sections of the Act direct the modes in which the income is to be levied. No one of those sections can be treated as general or specific for the purpose of any one particular source of income ; they are all specific and deal with various heads in which an item of income, profits and means of an assessee falls. These sections are mutually exclusive and where an item of income falls specifically under one head, it has to be charged under that head and no other. On consideration of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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