1999 (6) TMI 15

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....entitled to the benefit of registration under the Income-tax Act, notwithstanding that the main activity of the assessee was letting out of godowns constructed by it and receiving rental income therefrom, for the assessment years 1979-80 and 1980-81 ?" The facts in brief are that the godowns constructed by the assessee have been let out to Aries Agro Vet Industries (P.) Ltd., the rental income from the godowns has been shown as business income and deductions like depreciation and miscellaneous expenses are claimed. The Income-tax Officer assessed the rental income under the head "business" after allowing deductions claimed by the assessee for the assessment years 1979-80 and 1980-81. He also granted registration for the two assessment ye....

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....tion under section 185(1)(a) of the Act. The assessee contended that he has entered into partnership for the purpose of carrying on construction and letting out the godowns and therefore its income is income from business and when once it is income from business, it is entitled for registration under section 185(1)(a) of the Act. In support of his contention he relied upon the following decisions : Nauharchand Chananram v. CIT [1971] 82 ITR 189 (P & H) ; CIT v. Vinod Bhargava [1988] 169 ITR 549 (AP) ; Prem Trading Co. v. CIT [1987] 166 ITR 211 (MP) ; and CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308 (SC). He vehemently contended that income from letting out of the godowns is business income and therefore they are entitled for r....

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....assessee went on putting up additional constructions and letting it out to various tenants which was in the nature of business activity, because, as pointed out in the earlier paragraph, it is a case where there is continuous activity and therefore that judgment is distinguishable on facts. The judgment of the Madhya Pradesh High Court in Prem Trading Co.'s case [1987] 166 ITR 211, is also similar to the judgment of the Punjab and Haryana High Court in Nauharchand Chananram's case [1971] 82 ITR 189. The judgment of this court in Vinod Bhargava's case [1988] 169 ITR 549 is a case where the assessee continued his building activity and had not leased out the entire building but only leased out the plant and machinery. Therefore, it was held....