COMMISSIONER OF INCOME TAX Vs. Y NARAYANA MURTHY

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Hyderabad Bench "a", referred the following two questions for our opinion :

(2.) THE Commissioner of Income-tax, Visakhapatnam, vide his order dated March 20, 1984, took the view that the income derived from letting out of the house property by the assessee consisting of godowns constructed for the benefit of the Food Corporation of India is assessable as income from property and not as income from the business. The Commissioner accordingly revised the order of the Assessing Officer for the assessment years 1979-80 and 1980-81. The Commissioner accordingly held that the assessee is not entitled to registration for the assessment year 1979-80 and continuation of registration for the assessment year 1980-81. The Commissioner took such a view after holding that the activity of letting out the godowns to the Food Corporation of India by the assessee cannot be treated as a business activity. Accordingly, directions were issued to take the status of the assessee as an association of persons for the relevant assessment years 1979-80 and 1980-81.

(3.) CONSEQUENT to the said orders, the assessing authority passed an order for 1979-80, which was upheld in the appeal by the Appellate Assistant Commissioner. For the assessment year 1981-82, the Income-tax Officer assessed the rental income as income from the house property and the same was also upheld by the Commissioner of Income-tax (Appeals ). As against the said order of the Commissioner of Income-tax (Appeals) for 1981-82 and that of the Appellate Assistant Commissioner for 1979-80, the assessee preferred I. T. A. Nos. 454 and 455 of 1984 and I. T. A. Nos. 1527 and 120 of 1985. Thus the dispute relates to the assessment years 1979-80, 1980-81 and 1981-82.