TaxTMI 
TaxTMI 
1971 (8) TMI 18
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....he conclusion that the income in question is income from property and as such is assessable under section 9 of the Act; that being so, the same cannot be assessed under section 10. In the result it answered the question in the negative and in favour of the department. The assessment years with which we are concerned in these appeals are 1956-57 and 1957-58, the corresponding accounting periods being the calendar years 1955 and 1956. The facts as set out in the statement of the case submitted by the Tribunal are as follows: The assessee-company owned house properties, popularly known as Karnani Mansion in Park Street, Calcutta. The said Karnani Mansion, consists of numerous residential flats and over a dozen shop premises. All those were let out to different tenants on a monthly rental basis. The tenants in respect of each of the flats and shops let out had to make a monthly payment which included charges for electric current, for use of lifts, for the supply of hot and cold water, for the arrangement for scavenging, for providing watch and ward facilities as well as other amenities. The Tribunal further found that the assessee-company purchases from the Calcutta Electric Supp....
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....ssioner, the assessee took up the matter in appeal to the Income-tax Appellate Tribunal, challenging the finding of the Income-tax Officer as well as the Appellate Assistant Commissioner as to the true character of that part of the receipts which had been brought to tax by the Income-tax Officer under section 12. The assessee contended that the said amount should have been assessed under section 10 and the department's case was that the Income-tax Officer had rightly assessed the same under section 12. Neither the assessee nor the department contended before the Tribunal that the same was assessable under section 9. The Tribunal accepted the contention of the assessee that the amount in question is assessable under section 10. Thereafter, at the instance of the department the question set out earlier was referred to the High Court of Calcutta for its opinion. The High Court of Calcutta did not accept the contention of the department that the amount in question is assessable under section 12 of the Act. On the other hand, it came to the conclusion that the same was assessable under section 9 of the Act. As seen earlier the department had all along proceeded on the basis that that ....
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....under Schedule D, with regard to such profits. The Crown contended that the company was in respect of all its activities carrying on a trade and that accordingly in computing its profits for the purposes of assessment under Schedule D, it was necessary to take into account all its receipts, including receipts from rents, an allowance being made for the amount of the assessments under Schedule A (Schedule dealt with rents of properties). Assessments under Schedule D (which includes business) were made upon the company upon this basis. The facts found were that the appellant-company was a company, the main objects of which were the acquisition, development, management, leasing and letting of land and property. Its properties were for the most part shops and blocks of offices and of flats in London, let unfurnished to tenants. The larger blocks of offices, etc., contained lifts, the liftman being provided by the company. The company also provided cleaning, heating, lighting and caretaking services in respect of which additional charges were made. The company admitted its liability to income-tax, under Schedule D, in respect of profits arising from such additional charges levied for th....
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....de, business or other enterprise carried on by him on his premises." We are referring to these observations only to show that the activities of the assessee with which we are concerned in these appeals are business activities. We should not be understood as having laid down that in assessing the profits and gains of a business, the profits and gains arising from the several activities of that business can be separately computed or separately brought to tax. If the facts are as found by the Tribunal--we must assume for the purpose of this case that the facts were correctly found by the Tribunal as there was no challenge to the correctness of those findings in the question referred to the High Court--then it is quite clear that the assessee had two sources of income and not one source as found by the High Court. Mr. Manchanda, learned counsel for the department, contended with some emphasis that there was no justification for the Income-tax Officer, the Appellate Assistant Commissioner as well as the Tribunal for coming to the conclusion that the services rendered by the assessee was an activity independent of letting out the premises to the tenants. According to him the primary ....