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TMI Blog2002 (10) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... at Thiruvananthapuram. The object of the shopping complex is to erect shopping complexes, houses, buildings and sell, lease, let out, mortgage or otherwise dispose of the shopping complexes and the houses built. The sale as well as the leasing out or mortgage can be in respect of part of the property or in full. There are various other objects, which are incidental or ancillary to the attainment of the main object of the company. According to the assessee, it acquired an immovable property at South Street, Fort, Trivandrum. After demolishing the existing structure a new shopping complex was put up at a total cost of Rs. 80 lakhs approximately. Funds for the construction included loan from the State Bank of India, Trivandrum, the constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A return showing a loss of Rs. 10,79,807 was filed on December 31, 1993, i.e., Rs. 1,90,018 is towards business and Rs. 8,80,789 is towards depreciation. The depreciation includes depreciation for the building. The Assessing Officer did not issue any notice under section 143(2) within one year of filing the return. A notice under section 148 was issued on September 29, 1995, followed by a notice under section 142(1) calling for certain specific details. The assessee filed necessary details in support of its claim and also given a detailed note in support of its claim for offering the income under the head "Business". The Assessing Officer ignored the contention of the assessee and determined the income partly under the head "House property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was used as a market was constructed as far back as in 1876. No licence fee was charged in the beginning. A fee was later charged for providing certain basic amenities to meet the cost of supply. Later the licence fee was increased. The assessee sought assessment of the income as from business, but in view of the circumstances of the case where the assessee was not in the business of hiring out the market, but was only in enjoyment of the income therefrom. The appeals were dismissed, against which the matter was taken before the Tribunal. The Tribunal, by the impugned order, confirmed the order of the assessing authority. It is against that the present appeals have been filed. The following questions of law have been framed: "(i) Was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. Learned counsel for the assessee submitted that the assessee is doing activity of letting out building. Learned senior counsel for the Department submitted that in business activity a kind of risk is involved. It is more so in the business of letting out building. In the decision reported in Sultan Brothers P. Ltd. v. CIT [1964] 51 ITR 353 (SC); AIR 1964 SC 1389, it was observed thus: "Whether a particular letting is business has to be decided in the circumstances of each case. Each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. A thing cannot by its very nature be a commercial asset. A commercial asset is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. So long as the commercial asset is capable of being exploited as such, it has to be understood that its income is business income." In Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC), it is held as follows: "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. But a company formed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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