BABULAL AGRAWAL Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THIS is a reference under section 256 (1) of the Income-tax Act, 1961 (for short "the Act of 1961"), whereby the Income-tax Appellate Tribunal (for brevity "the Tribunal"), has referred the following question for answer by this court : "whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in allowing depreciation on the plinth platforms at the rate prescribed for the 'building' and not treating them as 'plant' ?"

(2.) TO understand the factual scenario, it is necessitous to state certain facts. The assessee had filed a return showing loss of Rs. 7,66,455. A notice under section 143 (2) of the Act of 1961 was served on him. It is pertinent to state here that the assessee had filed a return in the status of an association of persons consisting of 15 members. The source of income was indicated as rent received from the Food Corporation of India on hire of open plinth godowns for storage of foodgrains. The assessee had claimed depreciation of Rs. 10, Rs. 89 and Rs. 996 on the open plinth structure of godowns. The Assessing Officer required the assessee to inform how monthly income from leased godowns was considered as business income and why it should not be treated as income from house property. The assessee submitted his explanation and claimed that it was a business income and not the income from the house property. The Assessing Officer did not accept the submission of the assessee and treated the open plinth godowns as house property and imposed tax.

(3.) THE assessee preferred an appeal and the appellate authority, namely, the Commissioner of Income-tax (Appeals), Bhopal, came to hold that letting out the open plinth godowns to the Food Corporation of India was assessable only under the head of income from business. Thus, this facet of the appeal was allowed. At this juncture, we may clarify that no other point having been referred before the Tribunal, we need not advert to the other aspects.