| Case ID |
267eec4e-2fe2-45f7-8775-d8c071dc17a4 |
| Body |
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| Case Number |
T.C. NOS. 198 TO 202 OF 1996 |
| Decision Date |
Sep 02, 2002 |
| Hearing Date |
|
| Decision |
The court concluded that the rental income received by the assessee for the renting out of warehouses to the Food Corporation of India should be assessed under the head 'Income from property' and not as business income. The court referenced previous Supreme Court decisions, emphasizing that the primary source of income being the warehouses made it irrelevant whether the lessee was consistent or varied. The tribunal's earlier decision to classify the income as business income was overturned, with the final ruling favoring the revenue's position. |
| Summary |
This case revolves around the classification of rental income from warehouses under the Income Tax Act, 1961. The Madras High Court analyzed whether such income should be assessed as 'Income from property' or as 'business income'. The court emphasized the distinction between the nature of the income derived from renting property versus income generated from business activities. Citing precedents set by the Supreme Court, the court clarified that the source of the income is paramount in determining its tax treatment. The ruling reinforces the legal framework governing property rental income and its implications for taxation, providing clarity for tax practitioners and businesses engaged in similar activities. This decision is significant for stakeholders in real estate and tax law, as it underscores the importance of accurate income classification for tax purposes. |
| Court |
Madras High Court
|
| Entities Involved |
Food Corporation of India
|
| Judges |
R. Jayasimha Babu,
K. Raviraja Pandian
|
| Lawyers |
T. Ravikumar
|
| Petitioners |
Not available
|
| Respondents |
Indian Warehousing Industries Ltd
|
| Citations |
2002 SLD 1627,
(2002) 258 ITR 93
|
| Other Citations |
Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC),
East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC)
|
| Laws Involved |
Income Tax Act, 1922,
Income Tax Act, 1961
|
| Sections |
6,
10,
22,
28
|