1994 (1) TMI 69

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.... Appellate Tribunal found that it cannot be ordinarily let out to strangers, because there will be none to take it on rent or run a factory there. The assessee-company let out that factory to its subsidiary for running a textile mill and received rent therefor. On these facts, the case of the Revenue was that the building has been let out by the assessee in its character as owner of the property and, therefore, the income should be assessed under the head "Income from property". The case of the assessee was that the property was a commercial asset and could have been exploited either by running a factory by itself or by letting it out, and since it was let out to its subsidiary for running a factory, the income derived therefrom should be ....

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....ounsel for the assessee relied on the decision in CIT v. Vania Silk Mills (P.) Ltd. [1978] 112 ITR 701 (Guj) and also on the decision in CIT v. Vikram Cotton Mills Ltd. [1988] 169 ITR 597 (SC), to contend that a commercial asset could be exploited even by letting it out where the assessee is unable or finds it inconvenient to utilise it in its own business. It was also submitted that since the Revenue has not challenged the finding of the Tribunal that the asset in this case was a commercial asset, the answer to the question should be in the affirmative. The principle upon which this question was to be decided has been enunciated by the Supreme Court in Sultan's case [1964] 51 ITR 353, 358, that "whether a particular letting is business ha....