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1 - 10 of 18 (2.46 seconds)Section 22 in The Income Tax Act, 1961 [Entire Act]
Section 185 in The Income Tax Act, 1961 [Entire Act]
S. G. Mercantile Corpn. (P) Ltd vs The C.I.T., Calcutta on 4 January, 1972
In S. G. Mercantile Corporation P. Ltd. v. CIT , the facts were that the assessee took on lease a market place for a term of 50 years undertaking to spend Rs. 5 lakhs for remodelling and repairing the structures on the site. It was also given the right to sub-let different portions. The question was whether the assessee's activity amounted to business. It was held that "business" would embrace in itself dealing in real property as also the activity of taking a property on lease, setting up a market the thereon and letting out the shops and stalls in the market. The taking of the property on lease and sub-letting portions thereof was held to be a part of business and trading activity of the appellant. We fail to see how this case renders any assistance to the assessee. This was not a case of enjoyment of the property by an owner by giving it for rent. It is a case where property is taken on lease for the purpose of construction of a market and realising profits by sub-letting it in portions as the lease was for a period of 50 years. It certainly amounts to a business activity as distinguished from the activity carried on by the assessee in the case before us, namely, mere letting out a building of which he is the owner.
Nauharchand Chananram vs Commissioner Of Income-Tax on 6 October, 1970
15. Nauharchand Chananram v. CIT , is a case of exploitation of a commercial asset. The owner of a factory instead of running it himself leased it out. The Punjab High Court said that it amounts to a business activity for earning profits from a commercial asset.
Karnani Properties Ltd vs Commissioner Of Income Tax, West Bengal on 27 August, 1971
In another decision in Karnani Properties Ltd. v. CIT , the facts were that the assessee owned a big mansion consisting of numerous residential flats and a dozen shops and the tenants not only paid the rents, but also electricity charges for the use of lifts, for supply of hot and cold water, for arrangement for scavenging, for providing watch and ward facilities and other amenities. The assessee maintained a separate water pump-house and a boiler for the supply of hot and cold water to the tenants. For all these purposes, the assessee maintained a large number of permanent staff. In these circumstances, it was held by Justice Hegde, speaking for the court, that "it is a business activity as the services rendered were the result of its activities carried on continuously in an organised manner with a set purpose and with a view to earn profits. This is a case of a multi-storeyed complex with residential flats and shops rendering numerous services to the tenants by making special provisions like lifts, separate water connections and boilers and maintaining a big establishment and staff. This case, in our view, has no application at all to the facts of the present case.
Commissioner Of Income-Tax vs Admiralty Flats Motel on 3 July, 1979
In CIT v. Admiralty Flats Motel , one G, who obtained properties in a partition gifted to his wife and daughters the land which he obtained on partition and made some constructions on the land. G and his wife entered into a partnership for carrying on business as lodging house-keepers along with the two daughters. The Income-tax Officer refused registration among other grounds that the income derived by the firm by letting out flats is an income from property and there was no business with reference to which there could be a firm. The question was whether this view of the Income-tax Officer was right. On the facts, the court held that the intention of the parties was to run a business of lodging housekeepers, that the letting out of furniture and other articles had been conceived by the firm as a substantive, systematic and organised course of activity and that it was linked with and incidental to the carrying on of business of a lodging house and hence the income from the letting out of furniture and other articles would be of a business nature. Thus, this is a case where the partnership was formed for the purpose of running a lodging house and the letting out of furniture was linked with that business.
Addl. Commissioner Of Income-Tax vs Lakshmi Industries And Cold Storage Co. ... on 6 August, 1982
In CIT v. Lakshmi Company , the assessee therein had taken buildings on lease and let them as warehouses and godowns and realised rents therefrom. The Income-tax Officer and the Appellate Assistant Commissioner held that the activity is not a business activity. The Tribunal held to the contra observing that it comes under "occupation" within the meaning of section 2 (b) of the Partnership Act. On a reference, it was held by the Madras High Court that the activity of taking premises on lease, putting up constructions as annexe thereto and letting them out to various tenants was in the nature of a business activity and "not what an ordinary property owner would do". We fail to see how this decision can help the assessee. On the other hand, it is against the assessee as the court expressly observed that such activity is a business activity and that it was not incidental to the ownership of the property.