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TMI Blog2018 (5) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... space on rent. Notably, the appellantassessee is engaged in the business of shipping agency and warehousing. The property in question, which is a warehouse, is located at Kandla where assessee is carrying out its business activities of shipping agency, etc. The crux of the stand of Revenue is that the impugned sum has been earned by the assessee for making available its warehouse/godown space and, therefore, it was an income derived from letting-out of property and thus, the same is assessable as "income from house property". No doubt, in a case of earning income from renting of property simpliciter, the income would be assessable as "income from house property". So, however, it is a trite law that situations other than simple letting-out of property or activities which involve more than letting-out of property can, under given circumstances, be assessable as "business income". In this context, we may refer to the judgment of Hon'ble Supreme Court in the case of M/s. Rayala Corporation Pvt. Ltd. vs ACIT, 44 ITR 362 (SC) to point out that the manner of carrying out the activity, and the nature of dealing of property in question are determinative of the issue as to whether the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Vora Warehousing (P.) Ltd. vs. ACIT, [1999] 70 ITD 518 (Mum)(SMC) is also relevant where it has been observed that the warehouses constructed with facility to store goods are to be considered as "commercial assets" and income realised by letting-out such facility was assessable as "business income". Considered in the aforesaid light, in our view, in the present case, the Assessing Officer was not justified in considering the income from godown rent as "income from house property". 9. Apart therefrom, there is also the principle of consistency inasmuch as for Assessment Years 2006-07 and 2007-08, assessments have been completed u/s 143(3) of the Act and copies of the respective orders have been placed in the Paper Book at pages 12 and 15 respectively. In the assessment order dated 31.10.2008 for Assessment Year 2006-07, there is an elaborate discussion in the context of such activity inasmuch as the Assessing Officer has discussed the allowability of expenditure incurred on godown on various heads and partial disallowance has been made in terms of Sec. 37(1) of the Act. Quite clearly, the Assessing Officer was conscious of assessing the income from godown rent under the head ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activity, in that event, it should be held as a "business income". In the background of the aforesaid legal position, the Hon'ble High Court found on facts of the case before it that the income was earned merely from letting-out of property and, therefore, held it to be assessable as "income from house property". The said legal position has been approved by the Hon'ble Supreme Court in its judgment reported in the case of Shambhu Investment (P) Ltd. (supra). So far as the facts in the instant case are concerned, there is no case made out by the Revenue as to how it can be said that the manner in which the assessee has dealt with the impugned property, it was with the intention of earning rental income only. In fact, providing of warehousing/godown space to various clients at the port of import is in assessee"s line of business of shipping agency, etc. and it is a case where the property has been exploited for commercial business activity which, inter-alia, included providing of warehousing space. Therefore, in our view, the decision in the case of Shambhu Investment (P) Ltd. (supra) does not help the case of Revenue, having regard to the instant fact-situation. 10. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for Assessment Year 2008-09 also. 13. So, however, in Assessment Year 2008-09 the captioned proceedings are as a consequence of assessment being reopened by issuance of notice under Sec. 147/148 of the Act. In the original assessment finalised u/s 143(3) of the Act dated 06.11.2009, the income from godown rent was assessed as "business income". The assessee has also challenged the validity of the proceedings initiated under Sec. 147/148 of the Act on the ground that the same is based on a mere change of opinion, with facts remaining the same. In this context, our attention has been drawn to the reasons recorded for reopening the assessment, a copy of which is placed at page 27 of the Paper Book. As per the reasons recorded, the Assessing Officer noted that the receipts from godown rent and facilities have been assessed as "business income" instead of "income from house property" and that the same should have been chargeable to tax under the head "income from house property" as per the judgment of the Hon'ble Supreme Court in the case of Shambhu Investment (P) Ltd. (supra). Thus, the solitary reason weighing with the Assessing Officer to reopen the assessment in order to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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