TaxTMI 
TaxTMI 
TaxTMI 
2004 (4) TMI 12
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....as indicated as rent received from the Food Corporation of India on hire of open plinth godowns for storage of foodgrains. The assessee had claimed depreciation of Rs. 10, Rs. 89 and Rs. 996 on the open plinth structure of godowns. The Assessing Officer required the assessee to inform how monthly income from leased godowns was considered as business income and why it should not be treated as income from house property. The assessee submitted his explanation and claimed that it was a business income and not the income from the house property. The Assessing Officer did not accept the submission of the assessee and treated the open plinth godowns as house property and imposed tax. The assessee preferred an appeal and the appellate authority, namely, the Commissioner of Income-tax (Appeals), Bhopal, came to hold that letting out the open plinth godowns to the Food Corporation of India was assessable only under the head of income from business. Thus, this facet of the appeal was allowed. At this juncture, we may clarify that no other point having been referred before the Tribunal, we need not advert to the other aspects. Being aggrieved by the order passed by the appellate authority, ....
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....ri Nema, learned counsel for the assessee, that the activity was not for letting out a property but it was activity in the nature of adventure, therefore, it was assessed under the head of "Income from business". It is noticeable that in the agreement entered into between the assessee and the Food Corporation of India, the assessee had offered certain facilities which were incorporated in the tender. On a perusal of the order of the first appellate authority who has scanned the anatomy of the agreement, it is perceptible that the assessee had purchased the plot and constructed platform thereon according to designs and specifications and as per the requirements and given to the Food Corporation of India. The first appellate authority noted certain special features, namely, the assessee had no intention to create property so as to earn rent; that it was done in response to the notice inviting tenders by the assessee; that the assessee responded and offered to make the required storage capacity to the Corporation; that the agreement enjoined upon the assessee to erect plinths on specific design building materials, specifications and storage capacity; that the plinth structure was to b....
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....tion clauses in order to enlarge the meaning of the words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import, but also those things which the interpretation clause declares that they shall include. The word 'include' is also susceptible of other constructions which it is unnecessary to go into." Eventually, their Lordships held as under: "It cannot be denied that the business of a hotelier is carried on by adapting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay and where there is arrangement for meals and other amenities are provided for their comfort and convenience. To have sanitary fittings, etc., in a bathroom is one of the essential amenities or conveniences which are normally provided in any good hotel, in the present times. If the partitions in Jarrold's case [1963] 1 WLR 214 (CA) could be treated as having been used for the purpose of the business of the trader, it is incomprehensible how sanitary fittings can be said to have no connection with the business of the ho....
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....perations and observed: 'It seems to me that every part of this dry dock plays an essential part .... The whole dock is, I think, the means by which, or plant with which, the operation is performed.' Lord Guest indicated a functional test in these words: 'In order to decide whether a particular subject is an "apparatus" it seems obvious that an enquiry has to be made as to what operation it performs. The functional test is, therefore, essential at any rate as a preliminary.' In other words, the test would be: Does the article fulfil the function of a plant in the assessee's trading activity? Is it a tool of his trade with which he carries on his business? If the answer is in the affirmative, it will be a plant. If the aforesaid test is applied to the drawings, designs, charts, plans, processing data and other literature comprised in the 'documentation service' as specified in clause 3 of the agreement, it will be difficult to resist the conclusion that these documents as constituting a book would fall within the definition of 'plant'. It cannot be disputed that these documents regarded collectively will have to be treated as a 'book', for, the dictionary meaning of that word i....
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....ulated. The insulation without the building cannot produce the result and the building without the insulation also equally disastrous for the purpose. The building with the insulation is an integral part for forming the apparatus or means. A building constructed otherwise than specified would not be able to house the insulation or produce the desired result. A cold storage is to be constructed in a particular manner and then insulated. The building of the cold storage is exclusively used for a cold storage and cannot be put to any other use. It is the storage with which the business is carried on. The racks are to be placed in a manner as specifically provided in rule 11 for distribution and circulation of temperature and air as well as for facilitating loading and unloading and preservation of the stores. The cold storage cannot run either with the rack or with the insulation without there being the building. The cold storage building housing the chambers is a consolidated and composite one providing the means or the apparatus or the tools of the business. For the purpose of maintaining the building, the Act and the Rules provide various conditions, which are mandatory in nature. ....