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TMI Blog1928 (1) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... h the sole object is to acquire land, build houses and let premises to tenants in Calcutta or elsewhere in India. The sole assets of the assessees consist of three properties and the sole business of the assessees is the management, and collection of rents from the said properties. 4. The opinion of the Commissioner of income-tax is that even if the assessees are held to be a business, they must be assessed in respect of the property owned by them according to the special provisions relating to property. 5. It will be observed that Section 6, Income-tax Act states that the following heads of income, profits and gains shall be chargeable to income-tax in the manner hereinafter appearing, namely. 6. Then comes six heads of which the third ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of house property are dealt with under Section 9 which is a particular, detailed and special scheme for ensuring that any property which comes within that section shall be taxed in a particular way. 7. Section 10 which dealt with business"profits or gains of any business carried on by him"is also provided with certain rules as to allowances to be made before 'Computing profits. These rules, in so far as they refer to house property, refer to "the premises in which such business is carried on," but with regard to insurance premiums, land revenue rates and taxes refer to buildings and premises "used for the purposes of the business." 8. In the present case we have a company which owns three estates. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany called the Kaladan Suratee Bazar Co. Ltd., which owned certain plots of land and stalls at Moulmein at a bazar there. Its income was derived from the rents of houses and bazar stalls belonging to it, and the financial Commissioner not disputing that it was subject to income-tax under Section 9 maintained that it was liable to excess profits duty because it was a "business" within the meaning of the Excess Profits Duty Act. The decision of the Court was that these two Acts were to be interpreted in the same way. It was pointed out that a person or a company drawing income from house property was clearly not contemplated in the Indian Income-tax Act, as carrying on a business but was treated as a person who derived income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its duty. That argument was rejected Mr. Justice Rowlatt saying that he was not carrying on a business because he was an owner of royalties and that he was not carrying on a business because he was a shareholder in a certain company. 11. Much reliance has been placed, however, upon certain cases of which the case of Commissioners of Inland Revenue v. Korean Syndicate Ltd. [1921] 3 K.B. 258 is the chief. There, again, was a question not whether the company was liable to pay under Sch. A, Income-tax Act, or under Schedule D, but whether it was liable to excess profits duty as carrying on a trade or business at all. It was a very complicated case and I do not propose to set out the facts, but it is clear that the company was originally incorp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ole the company was carrying on the business of financing this Indian railway and that although it had finished finding the finance and only had to 'receive what was due to it under the agreement it could not be said that it was no longer carrying on business. 12. In my judgment, these cases are not authorities to the effect that as between the "property" and the word "business" in Section 6, Income-tax Act, 1922, a case of this character is to be put under the word "business." It comes more directly and specifically under the word "property," In my judgment, the mare fact that the house owner is a company does not change the incidence of the tax in the way contended for. The income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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