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TMI Blog1970 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... plant and machinery for those purposes. In the year 1948-49, the oil mill business was stopped. In the year 1951-52, soap manufacturing business was also stopped ; but the assessee started rice-milling business. Rice-milling p business is still continuing. The assessee found that after the stoppage of the oil mill and soap business, certain godowns belonging to the assessee had fallen vacant. Those godowns, were let out to the U.P. Government and the Central Goverment for storing grain during the accounting year. The assessee received a sum of Rs. 9,906 towards rent for those godowns. This receipt was assessable as income during the assessment year. The assessee urged that receipt of Rs. 9,906 should be treated as income from business. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or vocation carried on by him. The question is whether the income amounting to Rs. 9,906 fell under section 9 or under section 10 of the Act. In Commissioner of Exress Profits Tax v. Sri Lakshmi Silk Mills Ltd. the assessee-company was a manufacturer of silk cloth and as part of its business it installed a plant for dyeing silk yarn. The plant remained idle for some time. It was, therefore, let out to a person on a monthly rent. The question was whether the sum representing the rent realised by the assessee was chargeable to excess profits tax as profits of business or was income from, other sources. It was held that it was income from business. The Supreme Court observed on pages 455 and 456 of its judgment thus : " Owning propertie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ider than the definition of that term under section 2(4) of the Income-tax Act In Commissioner of Income-tax v. National Mills Co. Ltd. a company was carrying on the business of manufacturing textiles. The liquidator let the plant and machinery of the company at a monthly rent for a period of three years. It was held by the Bombay High Court that there was material to justify the finding of the Appellate Tribunal that the income derived from the lease of the plant and machinery was income from business. It will be seen that in that case also what was let out was plant and machinery. In G. R. Narasimier Co. v. Commissioner of Income-tax, the assessee carried on a business of running a powerloom factory by manufacturing handloom cloth i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or five years on a monthly rent of Rs. 2,000. It was held that on a construction of the lease as a whole the income which the assessee received from the lease of the theatre and its equipment was income from business, and had to be assessed under section 10 of the Act, and not under section 12. It will be seen that in that case the department suggested that the case fell under section 12 of the Act. There was, therefore, no occasion for discussing the question whether the transaction was governed by section 9 of the Act. In Coringa Co. Ltd. v. Commissioner of Income-tax, the assessee-company carried on business in rice-milling and brick manufacturing. It leased out its rice-mill. It was held that the, commercial activity of the assessee-com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a specific head set out in section that fact that it may indirectly be covered by another head will not make the income taxable under the latter head. It will be seen that that is a direct decision on the question whether income from rent in such cases falls under section 9 or under section 10 of the Act. From the standpoint of the department, the present case is stronger, than the case of East India Housing and Land Development Trust Ltd. In that case the assessee-company was expressly incorporated with the object of buying and developing landed properties. Yet it was held that receipt from rent amounted to income from property under section 9 of the Act. In the present case the assessee-company was not established for earning pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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