2008 (8) TMI 522

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....in properties. The main object of the company as contained in the memorandum of association was to carry on business of dealing and investment in properties, flats, warehouses, shops, commercial and residential houses. The ancillary object was to carry on business of leasing, hire purchase, renting, selling, reselling or otherwise dispose of all forms of moveable or immovable properties and assets including buildings, godowns, warehouses and real estate of any kind. The assessee purchased flats for trading purposes at the cost of Rs. 4 crores. At the time of purchase of the building needed major repairs and according to the assessee as it expected that the prices of flats would go up after completion of repairs it made the purchases. It is ....

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....thorities that under the scheme of the Income-tax Act the heads of income, profits and gains enumerated in the different clauses are mutually exclusive and each specific head covering items of income arising from a particular source. 4. Reliance is then placed on a judgment reported in the case of Commercial Properties Ltd. v. CIT [1928] ILR 55 Cal 1057 wherein it is held that income derived from rental by a company whose sole object was to acquire lands, build houses and let them to tenants and whose sole business was management and collection of rents from the said properties, was held assessable under section 9 and not under section 10 of the Indian Income-tax Act, 1922. It was observed in that case that merely because the owner of th....

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....t is also held that in case the assessee is the owner of the building or land appurtenant thereto he would be liable to be taxed under section 9 even if the object of the assessee in purchasing the landed property was to promote and develop the market estate. Thus it can be seen even from the judgment relied upon by the appellant that distinguishing feature in the case of S. G. Mercantile Corporation P. Ltd. [1972] 83 ITR 700 (SC) was that the assessee was not the owner of the property in question. In the case in hand it is an admitted position that the assessee is owner of the property. The next judgment relied upon by the assessee is reported in the case of CEPT v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 (SC). In the said case the ....