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TMI Blog2002 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter to the Tribunal with a direction to reconsider the question afresh in accordance with law. - - - - - Dated:- 26-11-2002 - Judge(s) : N. V. BALASUBRAMANIAN., K. RAVIRAJA PANDIAN. JUDGMENT The judgment of the court was delivered by N.V. Balasubramanian J. - In pursuance of the directions of this court, the Income-tax Appellate Tribunal has stated the case and referred the following question of law in relation to the assessment years 1984-85 to 1986-87 of the assessee for our consideration under section 256(2) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the rental income derived from the leasing out of the property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The object clause, which was relied on by the Tribunal, reads as under: "To carry on the business of dealers in shares, stocks, debentures, stocks, bonds, obligations, whits, securities and to purchase, take on lease or in exchange, hire or otherwise acquire and deal in any movable or immovable property, pattas, licences, rights or privileges and to develop and turn them to account." The Tribunal was of the view that the objects clause would be sufficient to hold that the income from the property should be treated as income from business. The Tribunal held that the expression "turn them into account" in the objects clause would include the transaction of lease because essentially, the object of the assessee was to derive profit from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as having acquired the properties as commercial assets for the purposes of any business carried on by it and, therefore, the receipt of income from the properties held by the assessee-company cannot be referred to a substituted user of the commercial asset by the assessee-company, as claimed by it, so as to constitute the income from the properties as 'Profits and gains of the business' carried on by the assessee-company. Inasmuch as we have come to the conclusion that the properties were not held by the assessee-company as part of its business assets, it follows that the income from those properties were rightly assessed under the head 'Income from property', subject to the deductions provided under section 24 of the Act. In the view we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in CIT v. Shambhu Investment P. Ltd. [2001] 249 ITR 47. Learned counsel appearing for the assessee brought to our attention the decision of this court in CIT v. B. Nagi Reddy [1984] 147 ITR 337 and also the decision in CIT v. V.S.T. Motors P. Ltd. [1997] 226 ITR 155 (Mad). In all these cases, it was found that the asset was a commercial asset and therefore there was no difficulty in holding that the income derived from the commercial asset would amount to business income. Since the essential facts are lacking, we are of the view that the matter should go back to the Tribunal to decide the question in the light of the principles laid down earlier. It is also relevant to refer to the earlier decision of this court in CIT v. India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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