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TMI Blog2015 (5) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided in accordance with law. But, in so far as the Income-tax is concerned, that can only be levied in accordance with the provision of the Act. Submission of revenue that 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 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 [2011 (9) TMI 729 - Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's own case in the aforesaid judgment, it was held by this court that the income on account of rent from the unsold flats should be treated as an income from house property. He, as a matter of fact, very fairly also drew our attention to the judgment of the apex court in the case of S. G. Mercantile Corporation P. Ltd. v. CIT reported in [1972] 83 ITR 700 (SC), wherein the following view was taken (headnote) : In case the assessee is the owner of the buildings or lands appur tenant thereto, he would be liable to pay tax under section 9 even if the object of the assessee in purchasing the landed property was to promote and develop a market thereon. It would also make no dif ference if the assessee was a compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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. But a company formed with the specific object of acquiring properties not with the view of leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. The cases which have been cited in this case both for and against the assessee company must be applied with this distinction properly borne in mind. In deciding whether a company dealt with its properties as owner, one must see not to the form which it gave to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts and circumstances of this case. We have considered the rival submissions advanced by the learned advocates. As regards the first contention of Mr. Sharaf that the assessee cannot be permitted to blow hot and cold by taking one stand before the Income-tax authority and another before the wealth-tax authority, it can straightaway be pointed out that this question can be raised in the wealth- tax proceedings and may be decided in accordance with law. But, in so far as the Income-tax is concerned, that can only be levied in accordance with the provision of the Act. In so far as the second point of Mr. Saraf is concerned, it can be pointed out that the case of Karanpura Development (supra) was considered in the case of S. G. Mercantil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but as trader. Mr. Sharaf has missed the point that both in the case of S. G. Mercantile and in the case of Karanpura it was held that the income was to be treated as business income. The income in this case cannot be treated otherwise than arising out of house property because in this case the assessee is enjoying the property by giving the use of it to another on rent rather than enjoying it by itself. Therefore, the facts and circumstances of the present case are distinguishable from the facts and circumstances, which were before their Lordships in the case of Karanpura Development Pvt. Ltd. Another significant fact drawn to our attention is that in the memorandum of the assessee- company the first object includes the following a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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