9911796707
TMI Blog2015 (5) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, submitted that a concession on a point of law cannot bind the assessee. He drew our attention to a judgment of this court in the assessee's own case, Azimganj Estate Pvt. Ltd. v. CIT reported in [2013] 352 ITR 82 (Cal)), wherein the Division Bench held as follows (page 87) : ". . . the subject matter of exploitation being unsold flats still owned by the assessee, the Commissioner (Appeals) rightly concluded that the income therefrom should be treated as income from house property by way of letting it out." Mr. Sen, therefore, submitted that the order of the learned Tribunal to that extent is bad and should be set aside. Mr. Sharaf, lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that the assessee has to elect whether he wants the income to be treated as business income or income from house property. In case it is to be treated as an income from house property then the buildings are to be covered by the Wealth-tax Act. The assessee cannot claim the best of the both ; and (b) he drew our attention to a judgment of the apex court in the case of Karanpura Development Co. Ltd. v. CIT reported in [1962] 44 ITR 362 (SC), wherein the income was treated to be business income. Their Lordships held as follows (page 377) : "Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ases was not to derive profit by business done with those properties but to derive income by renting them out. Where a company acquires properties which it sells or leases out with a view to acquiring other properties to be dealt with in the same man ner, the company is not treating them as properties to be enjoyed in the shape of rents which they yield but as a kind of circulating capital leading to profits of business, which profits may be either enjoyed or put back into the business to acquire more properties for further pro fitable exploitation." He contended that the facts of this case are similar to those before their Lordships of the apex court and, therefore, the rental income of the assessee should be treated to under the head of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of a company with its professed objects and the manner of its activities and the nature of its dealings with its property, it is possible to say on which side the operations fall and to what head the income is to be assigned. Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another on rent. Where this happens, the appropriate head to apply is 'income from property' (section 9), even though the company may be doing extensive business otherwise. Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of."
Mr. Sharaf contended that the main object of the company appears to be dealing in property and, therefore, the object is business and, therefore, that should be treated as business income. This submission of Mr. Sharaf cannot be accepted because the object is both to earn money by selling the property as also by letting them out. It cannot be said that the company is not authorised by the memorandum to earn profit by letting out. Therefore, this submission of Mr. Saraf is not of any significance.
The point raised in this appeal is covered by a judgment of this court in the case of the assessee itself.
In that view of the matter, the question raised in this appeal is answered in favour of the assessee and the appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
|
