THE DCIT, CIRCLE-2(1), Guntur., Guntur V. M/s Sri Bharathi Warehousing Corporation, Guntur

ITA 275/VIZ/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2047 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSWAMY
• Keywords: Business income; Commercial expediency; Revised return

Judgement Text

ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.275/VIZAG/2012 ( / ASSESSMENT YEAR: 2008-09) DCIT CIRCLE - 2(1) GUNTUR VS. SRI BHARATHI WAREHOUSING CORPORATION GUNTUR [P AN: AAVFS5390J ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NO.78/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) DCIT CIRCLE - 2(1) GUNTUR VS. SRI BHARATHI WAR EHOUSING CORPORATION GUNTUR ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G. GURUSWAMY, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 07.01.2016 / DATE OF PRONOUNCEMENT : 1 9 .02.2016 ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 2 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST THE ORDER OF CIT(A), GUNTUR DATED 18.8.2011 & 15.10.2012 FOR THE ASSESSMENT YEARS 2008-09 & 2009-10 RESPECTIVELY. ITA NO.275/VIZAG/2012: 2. THE ASSESSEE FIRM MAINLY RECEIVING RENTAL INCOME AND ALSO INCOME FROM TRADE OF TOBACCO. IT HAD FILED A RETURN OF IN COME BY DECLARING TOTAL INCOME OF RS.22,74,280/-. IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEES SALES OF TOBACCO AMOUNTED TO RS.3,40,24,250/-. IN ADDITION TO THE S ALES, ASSESSEE ALSO RECEIVED RENTS OF RS.3,27,98,587/- AS ADMITTED IN T HE TRADING AND PROFIT & LOSS ACCOUNT, FILED ALONG WITH THE REVISED RETURN OF INCOME. THE RENTAL INCOME WAS RECEIVED BY THE ASSESSEE FIRM MAI NLY FROM THE FOLLOWING CONCERNS DURING THE YEAR. 1. STANDARD CHARTERED BANK, MUMBAI 2. BATA INDIA LIMITED, CALCUTTA. 3. EDS ELECTRONIC DATA SYSTEMS INDIA (P) LIMITED, BANG ALORE 4. FOOD WORLD SUPER MARKET (SPENCER) LIMITED 3. THOUGH THE NATURE OF THE BUSINESS OF THE ASSESSE E IS SHOWN IN THE 3 CD REPORT AS WELL AS IN THE PARTNERSHIP DEED AS TO CONSTRUCT GODOWNS ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 3 OR RESIDENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COMMERCIAL SHOPS ON THE LAND OWNED BY THE FIRM OR BY TAKING LAND ON LON G LEASE BASIS FROM OTHERS AND LEASED OUT OR SALE TO OTHERS, BESIDES CO NDUCTING TOBACCO BUSINESS. THE A.O. BY NOTING ABOVE HE CAME TO A C ONCLUSION THAT THE CORRECT HEAD OF THE INCOME UNDER WHICH THE RENTALS ARE TO BE BROUGHT TO TAX IS INCOME FROM HOUSE PROPERTY BUT NOT INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION. HE FURTHER NOTED THAT THE ASSESSEE HAS CONSTRUCTED THE BUILDING ON THE LANDS TAKEN ON LEASE BELONGING TO THE PARTNERS AND DERIVING THE RENTAL INCOME AND PAY ING LEASED RENTAL TO THE PARTNERS. THEREFORE, HE IS OF THE OPINION THAT THE ASSESSEE IS THE OWNER OF THE PROPERTY AND CALLED THE EXPLANATIONS F ROM THE ASSESSEE WHY THE INCOME SHOWN BY YOU I.E. INCOME FROM BUSINE SS SHOULD BE TREATED AS INCOME FROM HOUSE PROPERTY. IN RESPON SE TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSEE, THE ASSESSEE H AS REPLIED THAT THE OBJECT OF THE ASSESSEE FIRM AS PER THE PARTNERSHIP DEED IS TO TAKE THE PROPERTIES ON LEASE OR TO ACQUIRE PROPERTIES AND AF TER DEVELOPING OR CONSTRUCTING THE PROPERTY, LEASING OUT THE SAME ON RENTAL BASIS. FROM THE ABOVE IT IS VERY CLEAR THAT THE MAIN OBJECT OF THIS FIRM IS TO CARRY ON BUSINESS AND LETTING OUT THE PROPERTIES EITHER ACQU IRED, LEASED, CONSTRUCTED FOR A CONSIDERABLE RENT IN A SPECIFIED LEASING PERIOD. IN ADDITION TO THIS, THE ASSESSEE FIRM HAS ALSO CARRIE D ON THE BUSINESS IN ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 4 TOBACCO. THE INTENTION OF THE ASSESSEE FIRM IS LET TING OUT THE PROPERTY IS ONLY TO EARN A CONSIDERABLE AMOUNT OF RENT MUCH LIK E AN ORDINARY PRUDENT BUSINESS MAN. THE NATURE OF THE ASSESSEES BUSINESS IS LETTING OUT PROPERTIES ON COMMERCIAL BASIS. OWNERSHIP OF T HE PROPERTY AND LEASING IT OUT MAY BE DONE AS A PART OF THE BUSINES S OR MAY BE DONE AS PER THE LAND OWNER. IN THE ASSESSEES CASE, THE PR OPERTIES LEASED OUT ARE ONLY WITH BUSINESS MOTIVE AND NOT AS A LAND OWN ER. HE FURTHER SUBMITTED THAT THE ASSESSEE FIRM HAS TAKEN CERTAIN LANDS ON LEASE BASIS. THEREAFTER, AS CONSTRUCTED COMMERCIAL BUILDINGS SUB SEQUENTLY AS LET OUT SUCH CONSTRUCTED BUILDINGS TO VARIOUS TENANTS ON LE ASE BASIS IN A COMMERCIAL LINE AND SUBMITTED THAT THE WHOLE ACTIVI TY CARRIED BY THE ASSESSEE HAS TO BE VIEWED FROM THE STAND POINT OF A N ORDINARY PRUDENT BUSINESS MAN AND SUBMITTED THAT THE INCOME DERIVED BY THE ASSESSEE BY LETTING OUT THE PROPERTIES ON COMMERCIAL EXPEDIENCY HAS TO BE TREATED AS AN INCOME FROM BUSINESS. 4. AFTER CONSIDERING THE ABOVE EXPLANATION OF THE A SSESSEE, THE A.O. HAS NOTED AS FOLLOWS (I)(A) BUILDING WITH 11,560 SQ.FT. BUILTUP AREA AT RAHEJA TOWERS, M.G. ROAD, BANGALORE LEASED OUT FOR A MONTH LY RENT OF RS.6,66,000 PER MONTH UPTO NOV, 2007 AND FROM DEC.2 007 TO NOV.2010 FOR A MONTHLY RENT OF RS.7,99,200 TO STANDARD CHART ERED BANK. (I)(B) BUILDING WITH 1786 SQ.FT. AREA IN BASEMENT OF THE BUILDING RAHEJA TOWERS, M.G. ROAD, BANGALORE FOR US E OF CIT(A), ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 5 RAJAHMUNDRY PARKING AND OTHER AMENITIES LEASED OUT FOR A MONTHLY RENT OF RS.4,94,400/- PER MONTH UPTO 30/11/2007 AND THER EAFTER RS.5,93,280 PER MONTH TO STANDARD CHARTERED BANK. (II) SUPER BUILTUP AREA ADMEASURING 35400 SQ.FT. O N THE GROUND FLOOR AND 1800 SQ.FT. ON THE MEZZANINE FLOOR SITUAT ED ON THE LAND COMPRISED IN S.NO.1314/1, MADHAVARAM (V), AMBATTUR TALUK, THIRUVALLUVAR DISTRICT LEASED OUT TO BATA INDIA LIM ITED, CALCUTTA FOR A MONTHLY RENT OF RS.2,92,768. (III)(A) OFFICE SPACE ADMEASURING 1973 SQ.FT. AT N O.4 OF THE FIRST FLOOR OF THE BUILDING STEEPLE REACH SITUATE D AT NO.25, CATHEDRAL ROAD, CHENNAI LEASED OUT TO M/S. EDS ELECTRONIC DAT A SYSTEMS (INDIA) PVT. LTD., AT RS.1,12,089 PER MONTH UPTO 30.6.2007 AND RS.1,18,814 PER MONTH THEREAFTER. (III)(B) OFFICE SPACE ADMEASURING 2029 SQ.FT. AT N O.6 OF THE FIRST FLOOR OF THE BUILDING STEEPLE REACH SITUATE D AT NO.25, CATHEDRAL ROAD, CHENNAI LEASED OUT TO M/S. EDS ELECTRONIC DAT A SYSTEMS (INDIA) PVT. LTD., AT RS.1,15,270 PER MONTH UPTO 30.6.2007 AND RS.1,22,186 PER MONTH THEREAFTER. (III)(C) OFFICE SPACE ADMEASURING 1973 SQ.FT. AT N O.3 OF THE FIRST FLOOR OF THE BUILDING STEEPLE REACH SITUATE D AT NO.25, CATHEDRAL ROAD, CHENNAI LEASED OUT TO M/S. EDS ELECTRONIC DAT A SYSTEMS (INDIA) PVT. LTD., AT RS.1,12,089 PER MONTH UPTO 30.6.2007 AND RS.1,18,814 PER MONTH THEREAFTER. (III)(D) OFFICE SPACE ADMEASURING 2029 SQ.FT. AT N O.5 OF THE FIRST FLOOR OF THE BUILDING STEELPEL REACH SITUAT ED AT NO.25, CATHEDRAL ROAD, CHENNAI LEASED OUT TO M/S. EDS ELECTRONIC DAT A SYSTEMS (INDIA) PVT. LTD., AT RS.1,15,270 PER MONTH UPTO 30.6.2007 AND RS.1,22,186 PER MONTH THEREAFTER. (IV)(A) BUILDING WITH 12,250 SQ.FT. AT SEEVARAM (V ), NEAR ADYAR, CHENNAI LEASED OUT FOR A MONTHLY RENT OF RS. 77,542 UPTO 31.10.2007 AND THEREAFTER RS.89,180 PER MONTH TO M/ S. FOOD WORLD SUPER MARKETS LIMITED. (IV)(B) BUILDING WITH 53,000 SQ.FT. SUPER BUILTUP AREA AT SEEVARAM (V), NEAR ADYAR CHENNAI LEASED OUT FOR A M ONTHLY RENT OF ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 6 RS.3,35,225 PER MONTH UPTO 19.11.2007 AND THEREAFTE R RS.3,85,522 PER MONTH TO M/S. FOOD WORLD SUPER MARKETS LIMITED. 5. THE A.O. BY CONSIDERING THE ABOVE, HE CAME TO A CONCLUSION THAT THE INCOME RECEIVED BY THE ASSESSEE CANNOT BE TREAT ED AS A BUSINESS INCOME AND IS AN INCOME FROM HOUSE PROPERTY. ACCOR DINGLY, ASSESSMENT WAS COMPLETED. 6. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) BY FOLLOWING THE AS SESSEES OWN CASE FOR ASSESSMENT YEARS 2003-04 TO 2007-08, HE HAS HELD TH AT THE INCOME EARNED BY THE ASSESSEE IS INCOME FROM BUSINESS AND APPEAL FILED BY THE ASSESSEE WAS ALLOWED. 7. ON BEING AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 8. THE LD. D.R. HAS SUBMITTED THAT THE INCOME RECEI VED BY THE ASSESSEE AS AN INCOME FROM HOUSE PROPERTY AND NOT A BUSINESS INCOME. HE ALSO SUBMITTED THAT FOR ASSESSMENT YEARS 2003-04 , 2004-05 & 2005- 06 IN ASSESSEES OWN CASE, THE HONBLE ITAT IN ITA NO.67/VIZAG/2007 BY ORDER DATED 7.12.2010 HAS HELD THAT INCOME RECEIVED BY THE ASSESSEE IS AN INCOME FROM HOUSE PROPERTY AND NOT A BUSINESS IN COME. HE ALSO RELIED ON THE DECISION IN THE CASE OF EAST INDIA HO USING & LAND DEVELOPMENT TRUST LTD. VS. CIT 42 ITR 49(SC). HE FURTHER RELIED ON ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 7 THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE C ASE OF SULTAN BROTHERS PVT. LTD. VS. CIT 51 ITR 353. 9. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE ASSESSEE FIRM HAD UNDERTAKEN A SYSTEMATIC BUSINESS ACTIVITY I.E. TO ACQUIRE A LAND ON LEASE AND CONSTRUCT A BUILDING , LEASED OUT THE SAME TO COMMERCIAL AGENCIES FOR A HIGHER RENT AS PER THE OBJECTS OF THE ASSESSEE FIRM. THEREFORE, THE INCOME OF THE ASSESS EE HAS TO BE TREATED AS A BUSINESS INCOME AND SUBMITTED THAT THE ASSESSE ES CASE SQUARELY COVERS BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. CHENNAI PROPERTIES AND INVESTMENTS LTD., CHENNAI CI VIL APPEAL NO.4494/2004 DATED 9.4.2015. SO FAR AS THE DECISIO N OF THE ITAT IN ASSESSEES OWN CASE IS CONCERNED, THERE IS NO OCCAS ION FOR THE TRIBUNAL TO CONSIDER THE JUDGEMENT OF THE SUPREME COURT AND THEREFORE SUBMITTED THAT THE LATEST JUDGEMENT OF THE SUPREME COURT HAS TO BE FOLLOWED AND ALSO SUBMITTED THAT THE INCOME OF THE ASSESSEE HAS TO BE TREATED AS BUSINESS INCOME. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ASSESSEE IS SRI BHARATI WAREHOUSING CORPORATION E XISTED BY VIRTUE OF PARTNERSHIP DEED DATED 21.1.2000. AS PER THE PARTN ERSHIP DEED, THE OBJECT OF THE FIRM IS THE NATURE OF BUSINESS IS TO CONSTRUCT GODOWNS OR ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 8 RESIDENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COM MERCIAL SHOPS, ETC. ON LANDS OWNED BY THE FIRM OR BY TAKING LAND ON LONG L EASE BASIS FROM OTHERS, AS MUTUALLY AGREED UPON FROM TIME TO TIME, AND LEASE OUT THE SAME TO OTHERS. IT IS ALSO MUTUALLY AGREED THAT A NY OTHER BUSINESS ALSO MAY BE CARRIED WITH THE MUTUAL CONSENT OF ALL THE P ARTNERS IF DEEMED LUCRATIVE. FROM THE ABOVE, IT IS CLEAR THAT THE IN TENTION OF THE ASSESSEE IS TO ACQUIRE THE LAND BY ITS OWN OR BY LEASE OUT T HE LAND FOR A LONGER PERIOD AND THERE AFTER CONSTRUCT A BUILDING AND LEA SE OUT THE SAME TO THE THIRD PARTIES. THIS IS THE ACTIVITY OF THE ASS ESSEE. IN THE ASSESSMENT ORDER, THE A.O. HAS NOTED THAT THE ASSESSEE HAS LEA SED OUT NEAR ABOUT 4 PROPERTIES ONE TO STANDARD CHARTERED BANK, MUMBAI, SECOND TO BATA INDIA LIMITED, CALCUTTA, THIRD TO EDS ELECTRONIC DA TA SYSTEMS INDIA (P) LIMITED AND FOURTH TO FOOD WORLD SUPER MARKET (SPEN CER) LIMITED, THOUGH THE NATURE OF THE BUSINESS OF THE ASSESSEE I S AS PER THE PARTNERSHIP DEED TO CONSTRUCT THE GODOWNS OR RESI DENTIAL OR COMMERCIAL BUILDINGS OR FLATS OR COMMERCIAL SHOPS O N LAND OWNED BY THE FIRM BY TAKING LAND ON LEASE BASIS FROM OTHERS, LEA SED OUT OR SALE TO OTHERS, BESIDES CONDUCTING THE TOBACCO BUSINESS, C AME TO A CONCLUSION THAT THE INCOME RECEIVED BY THE ASSESSEE IS AN INCO ME FROM HOUSE PROPERTY AND NOT A BUSINESS INCOME BY FOLLOWING CER TAIN JUDICIAL PRECEDENTS. ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 9 11. WE FIND THAT THE ASSESSEE FIRM HAS UNDERTAKEN A SYSTEMATIC ACTIVITY I.E. TO TAKE A PROPERTY ON LEASE OR PURCHA SE AND CONSTRUCT A BUILDING AND LEASE OUT THE SAME TO A THIRD PARTY ON COMMERCIAL BASIS. ACCORDING TO THE ASSESSEE, THE ACTIVITY IS A BUSINE SS ACTIVITY AND THEREFORE THE INCOME DERIVED FROM THE BUSINESS ACTI VITY HAS TO BE TREATED AS A BUSINESS INCOME NOT INCOME FROM HOUSE PROPERTY. IN THIS CONTEXT, THE HONBLE SUPREME COURT IN THE CASE OF C HENNAI PROPERTIES (SUPRA) HAS OBSERVED THAT THE MEMORANDUM OF ASSOCI ATION OF THE ASSESSEE COMPANY, WHICH IS PLACED ON RECORD MENTION S MAIN OBJECTS AS WELL AS INCIDENTAL OR ANCILLIARY OBJECTS IN CLAUSE III(A) AND (B) RESPECTIVELY. THE MAIN OBJECT OF THE APPELLANT COM PANY IS TO ACQUIRE AND HOLD THE PROPERTIES KNOWN AS CHENNAI HOUSE AN D FIRHAVIN ESTATE BOTH IN CHENNAI AND TO LET OUT THOSE PROPERTIES AS WELL AS MAKE ADVANCES UPON THE SECURITY OF LANDS AND BUILDINGS O R OTHER PROPERTIES OR ANY INTEREST THEREIN. WHAT WE EMPHASISE IS THAT HOL DING THE AFORESAID PROPERTIES AND EARNING INCOME BY LETTING OUT THOSE PROPERTIES IS THE MAIN OBJECTIVE OF THE COMPANY. IT MAY FURTHER BE R ECORDED THAT IN THE RETURN THAT WAS FILED, THE ENTIRE INCOME WHICH ACCR UED AND WAS ASSESSED THE SAID RETURN WAS FROM LETTING OUT OF THESE PROPE RTIES. IT IS ALSO RECORDED AND ACCEPTED BY THE ASSESSING OFFICER HIMS ELF IN HIS ORDER. THE HONBLE SUPREME COURT BY CONSIDERING THE EAST I NDIA HOUSING & ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 10 LAND DEVELOPMENT TRUST LTD. VS. CIT (SUPRA) AND ALS O THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SULTAN BRO THERS PVT. LTD. (SUPRA) HAS HELD THAT LETTING OUT OF THE PROPERTIES IS IN FACT THE BUSINESS OF THE ASSESSEE, ASSESSEE THEREFORE RIGHTLY DISCLOS ED THE INCOME UNDER HEAD INCOME FROM BUSINESS IT CANNOT BE TREATED AS AN INCOME FROM HOUSE PROPERTY AND APPEAL FILED BY THE ASSESSEE IS ALLOWED. 12. IN THE PRESENT CASE, THE ASSESSEE HAS ACQUIRED THE LAND ON LEASE BASIS IN VARIOUS PLACES I.E. MUMBAI, KOLKATA, BANGA LORE, CHENNAI AND CONSTRUCTED COMMERCIAL COMPLEXES AND LEASED OUT THE SAME TO THE COMMERCIAL ENTREPRENEURS SUCH AS STANDARD CHARTERED BANK, BATA INDIA LIMITED, EDS ELECTRONIC DATA SYSTEMS INDIA (P) LTD. AND SPENCERS FOR A HIGHER RENTAL AMOUNT. THE INTENTION OF THE ASSESSE E IS VERY CLEAR FROM THE DATE ON WHICH IT IS EXISTED IS TO CARRY OUT THE BUSINESS ACTIVITY SUCH AS TO CONSTRUCT THE GODOWNS OR RESIDENTIAL OR COMME RCIAL BUILDINGS OR COMMERCIAL SHOPS, ETC. THE LANDS OWNED BY FIRM OR BY TAKING LAND ON LONG LEASE FROM OTHERS IS THE ACTIVITY OF THE ASSES SEE. IN OUR OPINION, THE JUDGEMENT OF THE HONBLE SUPREME COURT SQUARELY APPLIES TO THE FACTS OF THE CASE AND WE HOLD THAT THE INCOME EARNE D BY THE ASSESSEE IS INCOME FROM BUSINESS AND NOT INCOME FROM HOUSE P ROPERTY. 13. SO FAR AS THE ORDER OF THE ITAT IN THE ASSESSEE S OWN CASE (SUPRA) IS CONCERNED, THE TRIBUNAL HAS OBSERVED THAT ASSESS EE HAS CONSTRUCTED ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 11 ITS PROPERTIES AT VARIOUS PLACES AND LET OUT TO DIF FERENT TENANTS FOR A LONGER PERIOD, IT CANNOT BE INFERRED THAT THE ACTIV ITY OF THE ASSESSEE IS A BUSINESS ACTIVITY. SO FAR AS THE ABOVE OBSERVATION OF THE TRIBUNAL IS CONCERNED, THE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. S. PREMALATHA 367 ITR 298 (AP) HAS OBSERVED THAT THE LEASE WAS FOR A FAIRLY LONGER PERIOD DOES NOT BRING ABOUT ANY CHANG E IN THE CHARACTER OF RIGHTS. THE CONSTRUCTION OF THE BUILDING ON THE LA ND TAKEN ON LEASE WAS OBVIOUSLY FOR THE PURPOSE OF BUSINESS AND NOT WITH AN INTENTION TO OWN IT. IF THE INTENTION OF THE RESPONDENT WAS TO OWN THE PROPERTY, THE TRANSACTION WOULD HAVE BEEN DIFFERENT ALTOGETHER. THOUGH THE LEASE WAS ONE OF THE FORMS OF TRANSFER OF PROPERTY, IT DOES N OT LEAD TO CONFERMENT OF RIGHTS OR OWNERSHIP. 14. WE THEREFORE, RESPECTFULLY FOLLOWING THE JUDGEME NT OF THE HONBLE SUPREME COURT IN THE CASE OF CHENNAI PROPERTIES (SU PRA) THIS APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO.78/VIZAG/2013: 15. SO FAR AS APPEAL FILED FOR THE ASSESSMENT YEAR 2009-10 IS CONCERNED, THE FACTS ARE SIMILAR IN VIEW OF OUR DEC ISION IN THE ASSESSMENT YEAR 2008-09, THIS APPEAL FILED BY THE R EVENUE IS ALSO DISMISSED. ITA NO.275/VIZAG/2012 & ITA NO.78/VIZAG/2013 SRI BHARATHI WAREHOUSING CORP., GUNTUR 12 16. IN THE RESULT, THE APPEALS FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2008-09 & 2009-10 ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 19 TH FEB16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 19.02.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE DCIT, CIRCLE-2(1), GUNTUR 2. / THE RESPONDENT M/S. SRI BHARATHI WAREHOUSING C ORPORATION, 8-24-31, MANGALAGIRI ROAD, GUNTUR 3. ) / THE CIT, GUNTUR 4. ) ( ) / THE CIT(A), GUNTUR 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM