Business income treatment upheld for godown used integrally with cotton operations, not as house property income.

Income derived from a godown contiguous to a cotton ginning and pressing factory was treated as business income because the premises were earmarked only for storing, picking, clearing and mixing cotton and cotton waste. Its use was integral to the assessee's cotton business, and the occupants had no right to use it for any independent purpose. On those facts, the receipt was referable to business operations rather than to a mere letting of property, so it was assessable under the head business and not as income from house property.

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Issues: Whether the income derived from the godown used in connection with the assessee's cotton business was assessable as business income or as income from house property.

Analysis: The godown was contiguous to the assessee's ginning and pressing factory and was earmarked only for storing, picking, clearing and mixing of cotton and cotton waste. Its use was intimately connected with the business activity carried on by the assessee, and the lessees had no freedom to use it for any independent or different purpose. On the facts found, the receipt was referable to the business operations and not to a mere letting of property.

Conclusion: The income from the godown was correctly held to be assessable under the head business and not as income from house property.

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