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TMI Blog1982 (7) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... sultancy services. The sheds constructed were leased out under separate lease-deeds to various persons on rental basis. The amount received from the occupants of the sheds was claimed as business income. The ITO held that the amount received from the occupants of the sheds is assessable as income from property in these two years. On appeal, the Commissioner (Appeals) upheld the same. 3. The learned counsel for the assessee strongly urged that with the object of promoting industries in the State of Karnataka and to render such units even consultancy services, the assessee had constructed industrial estate known as 'Jai Bharath Industrial Estate', Bangalore. The assessee provided consultancy services such as technology, finance, managemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or as a holding-company, or by entering into partnership with others all types of manufacturing or service industries including Tourist Industry, Shipping, Commercial/Aviation, Hoteliering, Fishing, all types of Engineering Contracting, House Building, Plastics, Fertilisers, Electronics, Chemicals and Agrobased industries, and to render consultancy services in the areas of Science and Technology, Management, Finance, Taxation, Efficiency Audit and Personnel, and also to finance other financing institutions. 2. To do all acts and perform all functions failing within the description of 'Merchant Banking' as is known in business and industrial circles, other than 'Banking' as defined in the Banking Regulation Act, 1949. 3. To finance and/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnology, management, finance, taxation, efficiency audit and personnel selection and training'. The Industrial Credit Development Syndicate Limited, with which is amalgamated the erstwhile Syndicate Bank Ltd., has taken upon itself the task of completing a well appointed and compact industrial estate in Bangalore, the main features of which are detailed in the following paragraphs : Clause 8. Compensation : Compensation to be paid by the occupants to the Company will be determined on the basis of area, by mutual agreement, depending upon the extent and the situation of the shed and the type of construction, every occupant can also expect, in consideration of the compensation paid by him/them, the following services from the company : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicates that the assessee has rendered consultancy services also. This is not an ordinary case of constructing a building and letting it out. Here this is a case where an industrial estate complex has been constructed on a leasehold land providing all infrastructural facilities and the sheds have been let out to various persons who intend to start the industries. The assessee also provides to them consultancy services. Hence, the above venture is a business venture and the income received from the industrial sheds is business income. It cannot be assessed as income from property. 6. In the case of Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362, the Supreme Court observed : " As has been already pointed out in connection with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne must see not to the form which it gave to the transaction but to the substance of the matter . . . ." This decision met with approval by the Supreme Court in its later decision in the case of S.G. Mercantile Corporation (P.) Ltd. v. CIT [1972] 83 ITR 700. It was observed by the Supreme Court : " The above observations have a direct bearing. It is not necessary for the purpose of this case to say anything, beyond what has already been said while dealing with section 9 of the Act, about the view expressed in the above passage regarding the rental income of an owner being treated as business income in case it is received as part of trading activity because we are concerned in the instant case with an assessee who is a lessee and not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted vaults for storage of films. The question whether the income received from licensing the vaults to vault-holders was from business or from property, was considered by the Supreme Court. It was held ".....that the respondent was carrying on an adventure or concern in the nature of trade and the subject which was hired out was a complex one . . . The return received by the respondent was not income derived from the exercise of property rights only, but was income received from carrying on an adventure or concern in the nature of trade. The income arising from licensing the vaults to vault-holders had, therefore, to be computed under section 10 of the Indian Income-tax Act, 1922 and not under section 9. " 8. In Sultan Bros. (P.) Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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