COMMISSIONER OF INCOME TAX Vs. SANMAR HOLDINGS LTD

JUDGEMENT

(1.) IN pursuance of the directions of this Court, the Tribunal has stated the case and referred the following question of law in relation to the asst. yrs. 1984-85 to 1986-87 of the assessee for our consideration under S. 256(2) of the IT Act, 1961.

(2.) THE necessary facts of the case are as under : The assessee is a company in which the public are substantially interested and the assessment years with which we are concerned are 1984-85 to 1986-87. The assessee was deriving income from property situated at Cathedral Road, Madras, upon its being let out to M/s Chemicals and Plastics India Ltd. The assessee claimed that the income from the building should be treated as income derived from its business and hence assessable under the head 'Profits and gains of business'. The AO disallowed the assessee's claim and assessed the same under the head "Income from house property". The CIT(A) confirmed the order of the assessment. On appeal by the assessee, the Tribunal allowed the appeals preferred by the assessee and held that the income from the property should be assessed as income from business after allowing admissible deductions.

(3.) WE find from the order of the Tribunal that the Tribunal held that the rental income should be assessed under the head "Income from business or profession" as business on the basis of the object clause of the assessee's-company. The object clause, which was relied on by the Tribunal, reads as under :