COMMISSIONER OF INCOME TAX Vs. MITHILA PROPERTIES PUBLICATION AND CONTRACTOR ENTERPRISES PRIVATE LIMITED

JUDGEMENT

(1.) THIS reference under Sec. 256(1) of the Income -tax Act, 1961 ("the Act" for short), on an application filed by the Revenue, to the Income -tax Appellate Tribunal, Patna Bench, Patna, has been made to this court for its opinion on the following question of law, which appertains to the assessment year 1979 -80 : "Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the income derived by the assessee by letting out of the godowns to the Food Corporation of India on rent, was assessable under the head Business and not under the head Income from house property -

(2.) THE facts can be taken from the statement of the case, which has been drawn up by the Appellate Tribunal and are as follows :

(3.) THE assessee is a company. It took on lease a plot of land for a period of 25 years on payment of lease rent on monthly basis. On June 2, 1976, the assessee entered into an agreement with the Food Corporation of India (FCI) for construction of godowns and for letting out the said godowns to the Food Corporation of India on monthly rental basis. In its return for the assessment year 1979 -80, the assessee claimed that the rental income derived by it from the Food Corporation of India was its business income. The Income -tax Officer, however, negatived the assessees claim and held that the rental income received by the assessee from the Food Corporation of India was assessable under the head "Income from house property". Subsequently, on the Inspecting Assistant Commissioner (Assessment)s direction under Sec. 144B, the Income -tax Officer assessed the rental income in the hands of the assessee -company under the head "Income from other sources".