2014 (11) TMI 1214

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....assessee has preferred the present Tax Appeal for consideration of the following substantial question of law which were framed while admitting the matters: "(A) Whether, on the facts and in the circumstances, the Tribunal was justified in holding that the rental income from letting out of warehouses/godowns together with various services rendered to the occupant did not constitute a business activity of the appellant and as such the income arising therefrom was not assessable under sec. 28 of the Income-tax Act, 1961 as business income? Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal should not have arrived at conclusion that the income from letting out of the warehouse/godown was ass....

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....y under the head 'business income' and not as 'income from house property'. 4.1 Mr. Divatia has relied upon the decision of this Court in the case of Commissioner of Income-tax vs. Surat Textile Market Co-operative Shops and Warehouse Society Ltd reported in [2003] 264 ITR 289 wherein it is held that nominal rent for godown and shops constitutes income from other sources and that the income derived by the assessee by permitting use of auditorium by collecting charges would fall under the head 'business income'. It is held that the income which was derived by fulfillment of the object of the assessee to provide amenity to its members shall be construed as business income. It is further held that provision of canteen had to be construed as....

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....irectors of M/s. Kohinoor Tabacco Products (P) Limited. The electricity charges from October 1, 1989 to March 31, 1990, were paid to M/s. Mohanlal Hargovandas who were one of the members of the service centre and M/s. Saptarshi Services (P) Limited reimbursed them later. The assessee is having EPABX machine which facilitates providing telephone services to the occupants of the service centre. Besides this, the assessee is providing various services to the occupants like services of lift, services of receptionists, secretarial services, data processing, conference room, etc. The object of the said complex is that facilities to be provided with the building. Thus the assessee is providing a working place along with the various facilities. Aga....

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....hich means there were no constructed godowns and that there cannot be godowns without walls, doors and roofs. He submitted that therefore whatever the assessee earned from Indian Potash Limited cannot by any strength of imagination be said to be godown rent claimed to be assessable as business income. He has relied upon an unreported decision of this Court in the case of the same assessee on the same subject matter which was disposed of vide order dated 17.11.2014 rendered in Tax Appeals Nos. 276 to 282 of 2002. 6. We have carefully considered the submissions made by learned advocates for both the sides. The ground in this appeal relates to the head of income as to under which head warehousing charges (rent) is assessable. The Tribunal i....

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....ctivity of letting out of godowns for storage of fertilizers. M/s. IPL making payment for use of godowns for storage of fertilizers and such rental income squarely falls within the ambit and scope of "income from house property" chargeable to tax u/s 22 to 27 of the Act." 7.1 We are in complete agreement with the reasonings adopted and findings arrived at by the Tribunal. It is a settled law that whether any income falls under one head or the other has to be decided according to the common notions of practical and reasonable man for the act does not provide any guidance in the matter and that no general principle could be laid down which is applicable to all cases and each case has to be decided on its own facts and circumstances. ....