2008 (4) TMI 378

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....treating assessee's warehousing income as business income instead of property income. 2. The brief facts of the case are that the assessee was having several warehouses and was carrying on business of warehousing. The assessee while filing its return of income for the respective assessment years admitted the income of warehousing under business income. However, the AO was of the view that income from warehousing should be treated as income from house property and not income or profit from business or profession. Accordingly the AO assessed the income from these warehouses as income from house property and while doing so he relied on the decision of the Hon'ble jurisdictional High Court in the case of CIT vs. Indian Warehousing Industries L....

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....contended that the assessee in this way never let out the space to any party but only allowed storage of goods in these warehouses. The occupation and possession of these warehouses were also kept with the assessee. Even the assessee takes the responsibility of safety and security of the goods stored in the warehouses. The keys of the warehouses remained with the assessee. There is no question of letting out of the space to any of the parties who used the storage facility by the assessee. It is further contended that the assessee also provided the loading and unloading as well as safety and security of the goods and commodities etc. apart from providing the common facility of light, cleaning and sanitation. He, therefore submitted that the ....

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....e facts and in the circumstances of the case the Tribunal was right in law in holding that rental income for the mere letting of godowns received by the assessee should be assessed under the head 'Income from business' and not 'Property' has held that the source of income being the warehouses, it mattered little as to who the lessee for the time being was, whether it was the same lessee continuing over a period of time or a shifting class of lessees who occupied the spaces for shorter periods and paid rental for such use. The income was assessable as income from property. In the case in hand since the warehouses were not let out to the parties as the assessee never handed over the possession of the warehouses but only provided the facility ....

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....ssee cannot be said to be in occupation of the premises for the purpose of any concern of its own. He says that the licensees were in possession of the vaults as lessees and not merely as licensees. But, in our opinion, the agreements are licences and not leases. The assessee kept the key of the entrance which permitted access to the vaults in its own exclusive possession. The assessee was thus in occupation of all the premises for the purpose of its own concern, the concern being the hiring out of specially built vaults and providing special services to the licensees. As observed by Viscount Finlay in Governors of the Rotunda Hospital, Dublin vs. Coman 'the subject which is hired out is a complex one' and the return received by the assesse....