2016 (11) TMI 1255

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.....T.A. No.369/Pat of 2004 for the assessment year 1998-99. 2. The appellant is an assessee, who has constructed a commercial complex in the name and style of Pandooi Place at Boring Road, Patna. The assessee is drawing rental income from the same. The construction of this property was started relevant to assessment year 1990-91, but after completion of the building, no return was filed for the assessment year 1994-95 when assessment proceedings were initiated under Section 147 of the Act and a notice was issued to file its return. The assessee filed its return on 1st March, 2002 showing loss of Rs. 63,086/- claiming its status as Firm. However, the Assessing Officer found the status of assessee is of AOP and not as a Firm and assessed the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nd Land Development Trust Ltd. (supra) and Constitution Bench judgment in Sultan Brothers (P) Ltd. V. Commission of Income Tax, [1964] 51 ITR 353 were considered by the Hon'ble Supreme Court in Chennai Properties and Invest Ltd. (supra) and it was held that income in such circumstances has to be treated as income from business. The relevant extracts read as under: "9. After applying the aforesaid principle to the facts, which were there before the Court, it came to the conclusion that income had to be treated as income from business and not as income from house property. We are of the opinion that the aforesaid judgment in Karanpura Development Co. Ltd.v. CIT [1962 44 ITR 363(SC)] squarely applies to the facts of the present case. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s of the assessee. The assessee therefore, rightly disclosed the income under the head "income from business". It cannot be treated as "income from the house property". We, accordingly, allow this appeal and set aside the judgment1 of the High Court and restore that of the Income Tax Appellate Tribunal. No orders as to costs." 6. In a later judgment in Rayala Corporation Pvt. Ltd. (supra), the Hon'ble Supreme Court considered the judgment in S. G. Mercantile Corporation (P) Ltd. (supra) as well and returned the following finding:- "9. Upon hearing the learned counsel and going through the judgments cited by the learned counsel, we are of the view that the law laid down by this Court in the case of Chennai Properties (supra) show....