| Case ID |
1f69cba2-99f5-4c0e-8eb8-1848057dc0cf |
| Body |
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| Case Number |
IT REFERENCE No. 121 OF 1967 |
| Decision Date |
Aug 28, 1970 |
| Hearing Date |
|
| Decision |
The case was decided in favour of revenue. The court held that the income derived from letting out godowns was chargeable to tax under section 9 of the Indian Income-tax Act, 1922. The Tribunal's ruling that the rental income should be classified as income from property was upheld, reinforcing the principle that distinct heads of income are mutually exclusive. The judgment clarified that if an income item is specifically covered by a particular head of the Act, it cannot be taxed under another head that only incidentally relates to it. Therefore, the rental income of Rs. 9,906 was confirmed as income from property, emphasizing the nature of the assessee's business activities and the incidental nature of the godown rentals. |
| Summary |
In the case of Rampur Industries Ltd. v. Commissioner of Income Tax, the Allahabad High Court addressed the classification of rental income in relation to the Income-tax Act, 1961. The key issue revolved around whether the rental income from godowns, previously used for an oil mill and soap manufacturing business, should be assessed as income from property or business income. The court ruled that since the assessee was not established for the purpose of earning profit from the godowns, and the letting out was incidental to its primary business of rice milling, the rental income was rightly classified under section 9 of the Income-tax Act, 1922. This decision underscores the importance of clearly delineating income sources within the framework of tax legislation, confirming that income items under specific heads should not be taxed under others merely due to incidental connections. The judgment also referenced several precedents that supported the position that distinct heads of income should remain exclusive, thereby providing clarity for future cases involving similar circumstances. |
| Court |
Allahabad High Court
|
| Entities Involved |
Central Government,
Rampur Industries Ltd.,
U.P. Government
|
| Judges |
V.G. OAK, C.J.,
H.N. SETH, J.
|
| Lawyers |
A.N. Bhargava,
G.P. Bhargava,
B.L. Gupta,
Dr. R.R. Misra
|
| Petitioners |
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1971 SLD 713,
(1971) 82 ITR 23
|
| Other Citations |
East India Housing and Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC),
C.P. Pictures Ltd. v. CIT [1962] 46 ITR 1181(Bom.),
Commissioner of Excess Profits Tax v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 ; [1952] SCR 1 (SC),
CIT v. Calcutta National Bank Ltd. [1959] 37 ITR 171 ; [1959] Supp. 2 SCR 660 (SC),
CIT v. National Mills Co. Ltd. [1958] 34 ITR 155 (Bom.),
CIT v. National Storage (P.) Ltd. [1963] 48 ITR 577 (Bom.),
Coringa Co. Ltd. v. CIT [1966] 62 ITR 523 (AP),
Lakshmi Industries (P.) Ltd. v. CIT [1961] 41 ITR 645 (Mad.),
Narain Swadeshi Weaving Mills v. Commissioner of Excess Profits Tax [1954] 26 ITR 765 ; [1955] 1 SCR 952 (SC),
G.R. Narasimier & Co. v. CIT [1969] 73 ITR 257 (Mad.)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
22,
9
|