9911796707
TMI Blog2012 (10) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... e are that the assessee is a company registered under the provisions of Companies Act, 1956 and is engaged in the business of warehousing, handling and transport business. The assessee had filed return of its income for the relevant assessment years showing income from letting out of building and godown space as Income from Business . The Assessing Officer rejected the view of the assessee for treating the income from letting out of building and godown as business income and assessed the same as Income from House Property . Aggrieved against the assessment order for all the three relevant assessment years, the assessee preferred appeals before the CIT(A). The CIT(A) vide impugned order allowed all the three appeals of the assessee, hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of his contentions has relied on the judgement of jurisdictional High Court in the case of Keyaram Hotels (P) Ltd. Vs. ACIT., reported as 173 Taxman 262 (Mad) and CIT Vs. Chennai Properties Investments Ltd., reported as 136 Taxmann 202(Mad). 6. The D.R. submitted that for the assessment year 2005- 06 another issue which has cropped up for adjudication is with regard to advance paid to Shri N.Amrutesh Reddy, one of the Directors. The DR submitted that the assessee is a company in which public are not substantially interested and Mr. Amrutesh Reddy is a Director as well as shareholder holding 78% shares in assessee company. During the relevant period, the assessee had advanced loan to Mr. Amrutesh Reddy on various dates between 22.4.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is evident from the profit and loss account of the assessee company. The assessee has placed on record profit and loss account for the year ended on 31.03.2004, 31.03.2005 and 31.03.2007 which are at page 17, 22 and 27 respectively of the paper book. The counsel for the assessee also drew our attention to page 32 of the paper book wherein the facilities provided to the warehousing companies are mentioned. The counsel strongly supported the order of the CIT(A) and submitted that in view of the documents on record, it is clearly evident that the assessee is engaged in the business of letting out / leasing of godowns and warehouses. In order to fortify the submissions, the counsel for the assessee relied on the judgement of the Hon ble Bomb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ription whatsoever; (iii) To provide finance to construction buildings, sheds, godowns, warehouses, storage rooms and bins and/or acquire on lease or otherwise, buildings, sheds, godowns and warehouses. This clearly shows that the main objects of the company is to earn business profits by pursuing the business of warehousing, cold storage, godowns etc. A further perusal of the profit and loss account for the financial year ended on 31.03.2004 , 31.03.2005 and 31.03.2007 shows that the main source of income of the assessee was storages charges and maintenance charges/user charges. This makes it amply clear that the primary source of income of the assessee was letting out of godowns and warehouses to the manufacturers, traders and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has been entered into in respect of the immovable property in question should be treated as income from house property or as income from business . The Hon ble High Court held that what is material in such case is the primary object of the assessee while exploiting the property. If the primary or the dominant object is to lease or let out property, the income which is derived from the property would have to be regarded as income from house property . Conversely, if the dominate intention of the assessee is to exploit a commercial asset by carrying on a commercial activity, the income that is received would have to be treated as income from business. What has to be deduced is whether the letting out of the property constitutes a dom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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