NARAYANDAS KISHANDUTT Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (for short "the Act"), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following questions of law for the opinion of this court:

(2.) THE material facts giving rise to this reference as set out in the statement of the case are as follows. THE assessee is an HUF and carries on various kinds of business at its head office Mandsaur and a number of branches at various places. During the assessment year 1975-76, the assessee claimed that the rental income from various godowns and factories should be assessed under the head " Income from business " and not as " Income from property ". THE ITO negatived the contention of the assessee and assessed the rental income from various godowns and factories under the head " Income from property ". On appeal, the Commissioner (Appeals) and the Appellate Tribunal upheld the order of the ITO.

(3.) THE contention is not well founded. It was not the case of the assessee before the Revenue and it has not been found by the Tribunal that the lotting out of the factories and godowns was an act of commercial expediency or that it was incidental to the business of the assessee. No material was placed by the assessee before the Revenue in that regard. In the circumstances, the Tribunal did not commit any error of law in assessing the rental income from the factories and godowns received by the assessee under the head "Income from property". In view of this it is not necessary to discuss the cases relied upon by the learned counsel for the assessee in detail because they are all distinguishable on facts. We are, therefore, of the opinion that on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the rent received by the assessee from the various godowns and factories was chargeable under the head " Income from property " and not as " income from business ". Question No. 1 is, therefore, answered in the affirmative and against the assessee.