ALWAYS NEW Vs. THE INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal is preferred by the assessee, challenging the order passed by the authorities, which has treated the disputed income as the income from other sources.

(2.) THE assessee is a partnership firm carrying on the business under the name and style "M/s. Always New". It is in the business of garments. To carry on this business, the property bearing No. 181, Commercial Street, Bangalore, was taken on lease from its owner. The said premises was taken on lease for a period of five years commencing from 1.4.2000. The entire premises could not have been used for his business and had suffered loss; the assessee entered into an agreement dated 10.10.2000 under which the assessee sublet the portion of the building to M/s. Java Coffee Company Limited, to carry on the business of coffee shop on a rent of Rs. 27,500/ - per month. The terms of the agreement show that it is the minimum he is entitled to, otherwise he is entitled to 7.5% of the net sales. Therefore, it was contended that it is in the nature of licence. The said arrangement was terminated with effect from 31.10.2001. During the relevant accounting period, the assessee had received a sum of Rs. 19,25,000/ -. The assessee treated the said income as income from business. Now all the authorities have held that it is to be treated as income from other sources and not from business.

(3.) WE have heard the learned Counsel for the parties.