1998 (6) TMI 7

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..... nces of the case, the rent received by the assessee from the tenants of the business premises could be assessed as income from business ?" The first question of law referred to us related to the assessment years 1974-75 and 1975-76. The assessee is a banking company wholly owned by the Government of India. The assessee had shown in his accounts, an estimated profit of Rs. 21,81,464 and Rs. 39,61,352, respectively, on contracts in foreign exchange. The Income-tax Officer assessed the same as part of the total business income of the assessee. The Commissioner of Income-tax (Appeals) held that for an earlier assessment year, the Income-tax Appellate Tribunal allowed the loss on a similar transaction as revenue loss and following the earlier .....

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..... Rs. 4,69,867 as income from the property. The claim of the assessee before the Income-tax Officer was that a portion of its property was let out to its constituents and to tenants who had close business connection and, therefore, the rental income should be assessed under the head "Income from business". The Income-tax Officer rejected the claim which was upheld by the Commissioner of Income-tax (Appeals). The assessee filed an appeal before the Income-tax Appellate Tribunal which turned out to be unsuccessful. Learned counsel for the assessee strongly placed reliance on a decision of the Madhya Pradesh High Court in the case of CIT v. National Newsprint and Paper Mills Ltd. [1978] 114 ITR 388 and submitted that the intention of the ass .....

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..... d, it is not possible for the assessee to take the income from one head of income to another head. Admittedly, the income from the letting out of the property is assessable only under the head "Income from house property" and it is not open to the assessee to claim that it should be assessed under the head "Income from business or profession". On the facts and circumstances of the case, it is clear that there was no link between tenants and the business carried on by the assessee. The business carried on by the assessee is banking business and it has nothing to do with the letting out of a portion of the property owned by it. We, therefore, hold that the Tribunal has come to the right conclusion in holding that the income from the property .....

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