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TMI Blog2021 (4) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... f earning the rental income, as per the Memorandum of Associations only and the fact is that they were not carrying on any other business, compels us to come to the conclusion that the present appeals of the Assessees are required to be allowed. The same are accordingly allowed and the question of law framed above is answered in favour of the Assessee - Tax Case Appeal Nos.244 & 245 of 2021 And CMP.No.6290 of 2021 - - - Dated:- 30-3-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Ms.Justice R.N.Manjula For the Appellant : Mr.Karthik Ranganathan, SC For the Respondent : Ms.N.V.Lakshmi COMMON JUDGMENT T.S.SIVAGNANAM, J. These appeals have been filed by the Revenue under Section 260A of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is squarely covered by the recent judgment of the Division Bench of this Court in the case of M/s. PSTS Heavy Lift and Shift Ltd., Wavoo Mansion, 2nd Floor 48, (Old No.39), Rajaji Salai vs. M/s. CeeDeeYes IT Parks Pvt. Ltd., decided on 30 January 2020, in Tax Case Appeal Nos.2193 to 2195 of 2008 979 of 2009. Paragraphs 17 to 22 of that judgment are quoted below for ready reference :- '17. We are of the clear opinion that once the property in question is used as business asset and the exclusive business of the assessee company or firm is to earn income by way of rental or lease money, then such rental income can be treated only as the Business Income of the Assessee and not as Income from House Property . The Heads of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end upon the facts of each case and where such income is earned by the Assessee by way of utilisation of its business assets in the form of property in question or as an idle property which could yield rental income by its user, by the lessees. In the earlier provisions of Income from House Properties, even the notional income under the Head Income from House Property ; was taxable in the case of self-occupied properties by landlords, is a pointer towards that. 19. Since, in the present cases, it is not even in dispute that all the exclusive and main source of income of the Assessee was only the rentals and lease money received from the lessees in both the cases and the Assessing Authority took a different and contrary view mainly to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be taxed as Income from house property. 21. Moreover, the Heads of Income, as defined in Section 14 of the Act do not exist in silos or in watertight compartments under the Scheme of tax and thus, these Heads of Income, as we have noted above, are fields and heads of sources of income depending upon the nature of business of the Assessee. Therefore, in cases where the earning of the rental income is the exclusive or predominant business of the Assessee, the income earned by way of lease money or rentals by letting out of the property cannot be taxed under the Head Income from house property , but can only be taxed under the Head Income from business income . 22. In view of the aforesaid, where the facts of the cases ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee during the relevant year was from any of its idle properties and the Assessee company used to enjoy such properties as a landlord from only earning the rental income. 8. On the contrary, it seems that the Assessee diversified and added its business line for the development of real estate of particular type, namely software companies and even though the name of the company continue to remain as M/s. Khivraj Motors Pvt. Ltd. The burden of the argument of the learned counsel for the Revenue, perhaps emanated from only the name of the company, forgetting that the main business activity of the company from its motor business had been diversified into developing a special kinds of property and earning lease rental income as its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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