AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1355
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....ome-tax (Appeals). 2. The facts giving rise to filing of this appeal may be summed up thus : (a) The assessee is a charitable trust and society and was enjoying exemption in the earlier assessment years. While making assessment for the relevant assessment year, the Assessing Officer was of the view that as the assessee was earning rent from the properties which were not owned by it, the said exercise done by the assessee for earning income is not incidental to the attainment of the object of the trust and accordingly, the said rental income received by the assessee was assessed as income from business by applying the provisions of section 11(4A) of the Income-tax Act, 1961. (b) Being dissatisfied, the assessee pre....
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....ise form for the purpose of deciding the appeal: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal has erred in holding that the provisions of section 11(4A) of the Income-tax Act, 1961 were not attracted in the case of the assessee for the assessment year 1991-92?" 5. Therefore, the only question that arises for determination in this appeal is whether a charitable trust, if acquires tenancy right in respect of some immovable property owned by a different person, and thereafter, sublets the said tenancy right and in the process earns some income, such income should be treated to be an income from business so as to attract the provisions contained in section 11(4A) of the Act as it stood at the ....
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.... arises in the present case, is whether sub-letting of the tenanted accommodation available to the assessee amounts to carrying on any business, i.e., is it carrying on any adventure or concern in the nature of trade, commerce or manufacture? If it was carrying on any adventure or concern in the nature of trade by sub-letting, then, section 11(4A) could be attracted. 9. The test whether in a given circumstance, the act of letting out tenements amounts to carrying on business was pointed out by the House of Lords in the case of Governors of the Rotunda Hospital, Dublin v. Coman [1919] 7 Tax Cas. 517. In that case, the Governors of a maternity hospital established for charitable purposes were the owners of a building which comprised rooms ad....
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....escribed as rents or profits of lands, tenements, hereditaments or heritages. They are the proceeds of a concern in the nature of a trade which is carried on by the Governors, and consists in finding tenants and having the rooms so equipped as to be suitable for letting." 10. Therefore, the true test is whether it is a simple letting out of the building or something more than letting out by bringing the case within the meaning of "carrying on any adventure or concern in the nature of trade or commerce." The above test has been approved by the Supreme Court in the case of CIT v. National Storage (P.) Ltd. AIR 1968 SC 70. 10A. In the above case of National Storage (P.) Ltd., (supra) the assessee-company was formed with the object of carryin....
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....are not incidental to the attainment of the object of the trust and assessee has also not maintained any separate books of account the income from this venture is treated as business income and brought to tax accordingly." 11. We have already pointed out that aforesaid finding has been reversed both by the Commissioner of Income-tax (Appeals) and the Tribunal and the Tribunal pointed out that to enable the trust to carry out its charitable object in effective manner if rental income was received by way of sub-letting, for that reason, the exemption could not have been denied by the Assessing Officer. 12. We, thus, find that there is no material which is available on record to justify the simple sub-letting done by the assessee in order to....
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....oint Family of Udayan Chinubhai v. CIT AIR 1967 SC 762 lays down the law on the subject : "It is true that an assessment year under the Income-tax Act is a self-contained assessment period and a decision in the assessment year does not ordinarily operate as res judicata in respect of the matter decided in any subsequent year, for the Assessing Officer is not a Court and he is not precluded from arriving at a conclusion inconsistent with his conclusion in another year. It is open to the Income-tax Officer, therefore, to depart from his decision in subsequent years, since the assessment is final and conclusive between the parties only in relation to the assessment for the particular year for which it is made. A decision reached in one year w....