TaxTMI 
TaxTMI 
2017 (2) TMI 556
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....d the above said I.T.A filed by the Revenue. 2) The assessee firmSri Bharathi Warehousing Corporation, Guntur which was incorporated under a partnership deed dated 21.01.2000 has been receiving rental income and also income from trade of tobacco. The said firm filed returns declaring its total income as Rs. 22,74,280/- for the Assessment Year 2008-09. It appears, the A.O in his assessment order noted that during the year under consideration, the assessees sales of tobacco amounted to Rs. 3,40,24,250/- and income from rents Rs. 3,27,98,587/- as admitted in the Trading and Profit and Loss Account filed by the assessee. The A.O observed, the rental income received by the assessee firm was mainly from the following concerns during the year: ....
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....ppeals). The said appeal was allowed in favour of the assessee holding that the income earned by the assessee by way of rents was part of the business. b) Aggrieved, the Revenue preferred I.T.A.No.275/Vizag/2012 before the I.T.A.T, Visakhapatnam Bench, Visakhapatnam. Relying on the judgment of Honble Apex Court in M/s.Chennai Properties & Investments Ltd., Chennai vs. The Commissioner of Income Tax Central III, Tamil Nadu (Civil Appeal No.4494 of 2004 dated 09.04.2015) , the Tribunal dismissed the appeal observing that the assessee in the instant case had, acquired the land on lease basis in various places like Mumbai, Calcutta and Chennai and constructed commercial complexes and leased out the same to the commercial entrepreneurs such as ....
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.... the Honble Supreme Court in the case of Chennai Properties & Investments Limited (Civil Appeal No.4494/2004 dated 09-04-2015) whose facts are not identical and similar? 4) Heard Smt. M.Kiranmayee, learned Senior Standing Counsel for Income Tax Department/appellant on the admissibility of appeal with reference to the above substantial questions of law. 5) Fulminating the order of the Tribunal, learned counsel would argue that the Tribunal in respect of the same assessee held for the Assessment Years 2003-04, 2004-05, 2005-06 in I.T.A.No.67/Vizag/ 2007 that the income received by the assessee was income from the house property and not a business income and in that view of the previous order, the Tribunal in the present instance also ought ....
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.... with the mutual consent of all the partners if deemed lucrative. a) Thus a close scrutiny of the above terms would unhesitatingly manifest that the main objective of the partnership firm was to carry on the business in construction of godowns, residential or commercial buildings or flats or commercial shops etc., on the lands either owned by the firm or by taking on long lease basis from others and lease out the same to others. The terms would further signify that doing of any other business was only ancillary to the main business and that too an optional one which is evident from the clause any other business also may be carried on with the mutual consent of all the partners if deemed lucrative. Non-mentioning of specific type of busines....
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....es would not be the income from business but the income from house property. The assessee then carried the matter to the Apex Court. Considering its earlier judgments, the Apex Court observed the deciding factor was not the ownership of the lands or lease but the nature of the activity of the assessee and the nature of the operations in relation to them and ultimately held, that the letting of the properties was in fact the business of the assessee and therefore, the assessee rightly disclosed the income under the head income from business and accordingly, allowed the appeal. d) Applying the above ratio to the instant case, it can be emphatically said that the main objective of the assessee firm as manifest from the partnership deed was to....