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Issues: (i) Whether the income from the temporary structures erected on leasehold land was assessable as income from property under section 9 of the Indian Income-tax Act, 1922, or as business income under section 12 of that Act. (ii) Whether the temporary structures erected by the assessee were "buildings" within the meaning of section 9 of the Indian Income-tax Act, 1922, so as to make the income therefrom assessable under that provision.
Issue (i): Whether the income from the temporary structures erected on leasehold land was assessable as income from property under section 9 of the Indian Income-tax Act, 1922, or as business income under section 12 of that Act.
Analysis: The assessee's limited ownership over the structures, as distinct from ownership of the land, did not exclude assessment under section 9. Income derived from structures let out under a building lease could still fall within the head "income from property" even where the site remained vested in the lessor. The contention that the receipts were business income was not supported by the record, and no factual foundation had been laid to show that the activity of putting up and letting out the structures formed part of a regular business.
Conclusion: The income was rightly assessed under section 9 of the Indian Income-tax Act, 1922, and not as business income.
Issue (ii): Whether the temporary structures erected by the assessee were "buildings" within the meaning of section 9 of the Indian Income-tax Act, 1922, so as to make the income therefrom assessable under that provision.
Analysis: The structures, though temporary and lightly constructed, were found on the evidence and valuation materials to have a life extending beyond a single season and to be capable of being let out from year to year. The factual finding that they were buildings was based on the nature of the materials used and the expected duration of the structures, and there was no basis to disturb that finding as perverse or unsupported by evidence.
Conclusion: The structures were buildings within the meaning of section 9 of the Indian Income-tax Act, 1922.
Final Conclusion: The reference was answered in favour of the Revenue, with the income from the structures held taxable as property income under section 9 of the Indian Income-tax Act, 1922.
Ratio Decidendi: A person may be assessed to income from property under section 9 of the Indian Income-tax Act, 1922, even where ownership of the site and structure is split or the ownership interest is contractually limited, provided the structures are buildings capable of being let out as property.
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