Karanpura Development Co. Ltd. v. CIT

44 ITR 362Supreme Court of India1962#625 most cited

What is Karanpura Development Co. Ltd. v. CIT authority for?

The income derived from letting out assets, such as coal mining leases, constitutes "profits and gains of business or profession" if the primary object and activity of the assessee company are to acquire, develop, and sub-lease such assets. This classification holds even if the income arises from letting, provided the letting itself constitutes the assessee's business.

157

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2009 to 2025.

Also referred to as

Karanpura Development Co. Ltd. v. CIT · income classification · business income · letting out assets as business · profits and gains of business · coal mining leases · Section 22 · Section 24 · income from business or profession · heads of income

Sections most often in play

Section 143(3)Section 143(2)Section 115BBESection 133ASection 143(1)Section 68Section 69ASection 139
Read the full judgment

Issues it is cited on

section 24(a)annual valueannual letting valuehouse property incomesection 22profits and gains of business or professionrule of consistencysection 69bsection 24income from other sourcesaddition u/s 68liable to tax

Judgments citing Karanpura Development Co. Ltd. v. CIT

Dynacon Equipments Pvt. Ltd., Chennai vs. ACIT Corporate Circle 1(4), Chennai

In the result, the appeal filed by assessee in ITA

ITA 2172/CHNY/2018[2006-07]Status: DisposedITAT Chennai21 Nov 2019AY 2006-07

Bench: Shri Ramit Kochar & Shri Duvvuru R.L.Reddy

For Appellant: Mr.Srinivasa Rao Vana, JCITFor Respondent: 21.11.2019
Section 143(3)Section 147Section 148

…as no other income of the assessee except the income from letting out of the said properties, which was the business of the assessee. On those facts, this Court came to the conclusion that judgment of this Court in Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC) was applicable and the judgment of this Court in East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC) was held to be distinguishable. In the present case, we find that situation is just the reverse. The judgment in East India Housing and Land Development Trust Ltd. (supra) which would be applicable which is discussed…

Basics It Solutions Pvt Ltd, New Delhi vs. ACIT Circle-4(1), New Delhi

In the result, the appeal filed by the assessee is allowed

ITA 5764/DEL/2019[2015-16]Status: DisposedITAT Delhi13 Sept 2019AY 2015-16

Bench: Sh. N. K. Billaiya & Ms. Suchitra Kambleassessment Year: 2015-16 M/S. Basics It Solutions Acit Pvt. Ltd. G-2, Nizamuddin Vs Circle – 4 (1) West, New Delhi-110013 New Delhi Pan No.Aaccb5118K (Appellant) (Respondent)

…der :- 6. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P.) Ltd. (supra), we would be well advised to discuss the law laid down authoritatively and succinctly by this Court in 'Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC). That was also a case where the company, which was the assessee, was formed with the object, inter alia, of acquiring and disposing of the underground coal mining rights in certain coal fields and it had restricted its activities to acquiring coal mining leases over large areas, developing them as coal fields and then sub-leasing them to coll…

Gulmohar Park Mall Pvt. Ltd., Ahmedabad vs. The Dy.CIT, Circle-4, Ahmedabad

In the result, both appeals are allowed as indicated above

ITA 3560/AHD/2015[2011-12]Status: DisposedITAT Ahmedabad27 Aug 2019AY 2011-12
Section 143(3)Section 57Section 57(2)(iii)

…come which is liable to be treated under the head of House Property only and can be bring to tax under the head of Business Income. 4.4. The assessee stated in its reply dated 13.03.2013 that it puts reliance on the decision K.Dev Co. Ltd Vs. CIT reported at 44 ITR 362 (SC) and in case of Sheetal Khurana Food Ltd. Vs. ITAT reported at 11 Taxman.com 68 wherein Hon’ble Punjab & Haryana High Court held that where the transactions of leasing is involving the business operations the income falls under the head business income and one has to consider all the factors for the purpose of deriving whether it is business o…

Gulmohar Park Mall Pvt. Ltd., Ahmedabad vs. The Dy.CIT, Circle-4, Ahmedabad

In the result, both appeals are allowed as indicated above

ITA 3559/AHD/2015[2010-11]Status: DisposedITAT Ahmedabad27 Aug 2019AY 2010-11
Section 143(3)Section 57Section 57(2)(iii)

…come which is liable to be treated under the head of House Property only and can be bring to tax under the head of Business Income. 4.4. The assessee stated in its reply dated 13.03.2013 that it puts reliance on the decision K.Dev Co. Ltd Vs. CIT reported at 44 ITR 362 (SC) and in case of Sheetal Khurana Food Ltd. Vs. ITAT reported at 11 Taxman.com 68 wherein Hon’ble Punjab & Haryana High Court held that where the transactions of leasing is involving the business operations the income falls under the head business income and one has to consider all the factors for the purpose of deriving whether it is business o…

DCIT 3 (1)(1), Mumbai vs. Banzai Estates Pvt. Ltd., Mumbai

ITA 3688/MUM/2018[2011-12]Status: DisposedITAT Mumbai21 Aug 2019AY 2011-12

Bench: Sri Mahavir Singh, Jm & Sri Rajesh Kumar, Am Aayakr Apila Sam./ Ita No. 3688/Mum/2018 (Inaqa-Arna Baya- / Assessment Year 2011-12) The Dy. Commissioner Of Banzai Estates Pvt. Ltd. Income Tax, 49, Bajaj Bhavan, Nariman Point, Vs. Room No. 607, Aayakar Mumbai-400 021 Bhavan, Mumbai-400 020 .. (P`%Yaqaai- / Respondent) (Apilaaqai- / Appellant) स्थायी लेखा िं./Pan No. Aaacb6915C अपीलाथी की ओर े / Appellant By : Shri Chaudhary Arun Kumar Singh, Cit Dr प्रत्यथी की ओर े / Respondent By : Shri Rohit Golecha, Ar ुनवाई की तारीख / Date Of Hearing: 13.08.2019 घोषणा की तारीख / Date Of Pronouncement : 21.08.2019 Aadosa / O R D E R

For Appellant: Shri Chaudhary Arun Kumar SinghFor Respondent: Shri Rohit Golecha, AR
Section 143(3)

…(P) Ltd. v. CIT, (1964) 5 SCR 807. They have further distinguished the case law of Chennai Properties & Investments Ltd 373 ITR 673 (SC) and Rayala Corporation (P) Ltd. For this Hon’ble Supreme Court relied on the Karanpura Development Co. Ltd. v. CIT, (1962) 44 ITR 362 and the judgment of Hon’ble Supreme Court in the case of East India Housing and Land Development Trust Ltd. v. CIT, (1961) 42 ITR 49 was distinguished. 7. In the given facts and circumstances and the decision of Hon’ble Supreme Court in the case of Raj Dadarkar & Associates (supra), respectfully following the same, we allow the claim of the asses…

Vijay Grihnirman P. Ltd, Mumbai vs. DCIT CC 3(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 7028/MUM/2017[2013-14]Status: DisposedITAT Mumbai17 Jul 2019AY 2013-14

Bench: Shri Pawan Singh & Shri G. Manjunatha

For Appellant: Shri Mani Jain (AR)For Respondent: Shri Rajeev Gubgotra (DR)
Section 143(3)Section 23Section 254(1)

…ng Co. Ltd. (supra). The ld. CIT(A) confirmed the action of Assessing Officer holding that the assessee has not objected about the working of ALV of the assessee. The ld. CIT(A) also relied upon the decision of Karanpura Development Co. Ltd. vs. CIT [1962] 44 ITR 362 (SC). Admittedly, the assessee has treated the unsold flat as stock-in-trade.There is no dispute that assessee not let out the unsold flat to any person, rather the unsold flat are in possession of assessee as 5 ITA No. 7028 & 7029 Mum 2017-M/s Vijay Grihnirman Pvt. Ltd stock-in-trade for the purpose of its business. The ld. AR of the assesse…

Canara Securities Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Central Circle-2(1), Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 2321/HYD/2018[2010-11]Status: DisposedITAT Hyderabad03 Jul 2019AY 2010-11

Bench: Smt. P. Madhavi Devi & Shri S. Rifaur Rahmanassessment Year: 2010-11 Canara Securities Ltd., Vs. Dy. Commissioner Of Hydereabad. Income-Tax, Central Circle – 2(1), Pan – Aaacc8283G Hyderabad. Appellant Respondent Assessee By: Shri Ramkishore Jhawar Revenue By: Shri Nilanjan Dey Date Of Hearing: 08/05/2019 Date Of Pronouncement: 03/07/2019 O R D E R

For Appellant: Shri Ramkishore JhawarFor Respondent: Shri Nilanjan Dey
Section 143(1)Section 147Section 148

…IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH ‘B', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Assessment Year: 2010-11 Canara Securities Ltd., vs. Dy. Commissioner of Hydereabad. Income-tax, Central Circle – 2(1), PAN – AAACC8283G Hyderabad. Appellant Respondent Assessee by: Shri Ramkishore Jhawar Revenue by: Shri Nilanjan Dey Date of hearing: 08/05/2019 Date of pronouncement: 03/07/2019 O R D E R PER S. RIFAUR RAHMAN, AM: This appeal filed by the assessee is directed against the order of CIT(A) – 6, Hyderabad, dated, 03/09/2018 for AY 2010-11. 2.…

Cache Properties Private Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-1(2), Hyderabad

In the result, the appeal filed by the assessee is allowed

ITA 571/HYD/2018[2014-15]Status: DisposedITAT Hyderabad27 May 2019AY 2014-15

Bench: Smt. P. Madhavi Devi & Shri S. Rifaur Rahman

For Respondent: Smt. Neeju Gupta, DR
Section 115JSection 143(2)Section 24

…as no other income of the assessee except the income from letting out of the said properties, which was the business of the assessee. On those facts, this Court came to the conclusion that judgment of this Court in Karanpura Development Co. Ltd. V. CIT [1962] 44 ITR 362(SC) was applicable and the judgment of this Court in East India Housing & Land development Trust Ltd., Vs. CIT [1961] 42 ITR 49 (SC) was held to be distinguishable. In the present case, we find that situation is just the reverse. The judgment in east India Housing and Land Development Trust Ltd. (supra) which would be applicable which is discussed…

The ACIT, Cochin vs. M/S.Ptl Enterprises Ltd, Cochin

In the result, the appeals filed by the Revenue are dismissed

ITA 162/COCH/2017[2013-14]Status: DisposedITAT Cochin06 May 2019AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Alok MitraFor Respondent: Sri.Abraham Joseph Markose
Section 56(2)(ii)

…g a business of renting his property and the rent which he receives is in the nature of his business income. 8.16. In the case of Chennai Properties and Investment Ltd. (supra), the Hon’ble Court followed the judgment of Karanpura Development Co. Ltd. v. CIT 44 ITR 362 (SC) wherein it has been held as under: 8.17 In fact in the case of Rayala Corporation (P) Ltd. (supra), it was undisputed position that assessee company had stopped its other business activities and was having only an activity with regard to the leasing its properties and earning rent therefrom and except leasing the company was not having any o…

The ACIT, Cochin vs. M/S.Ptl Enterprises Ltd, Cochin

In the result, the appeals filed by the Revenue are dismissed

ITA 161/COCH/2017[2012-13]Status: DisposedITAT Cochin06 May 2019AY 2012-13

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Alok MitraFor Respondent: Sri.Abraham Joseph Markose
Section 56(2)(ii)

…g a business of renting his property and the rent which he receives is in the nature of his business income. 8.16. In the case of Chennai Properties and Investment Ltd. (supra), the Hon’ble Court followed the judgment of Karanpura Development Co. Ltd. v. CIT 44 ITR 362 (SC) wherein it has been held as under: 8.17 In fact in the case of Rayala Corporation (P) Ltd. (supra), it was undisputed position that assessee company had stopped its other business activities and was having only an activity with regard to the leasing its properties and earning rent therefrom and except leasing the company was not having any o…

The ACIT, Cochin vs. M/S.Ptl Enterprises Ltd, Cochin

In the result, the appeals filed by the Revenue are dismissed

ITA 160/COCH/2017[2011-12]Status: DisposedITAT Cochin06 May 2019AY 2011-12

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Alok MitraFor Respondent: Sri.Abraham Joseph Markose
Section 56(2)(ii)

…g a business of renting his property and the rent which he receives is in the nature of his business income. 8.16. In the case of Chennai Properties and Investment Ltd. (supra), the Hon’ble Court followed the judgment of Karanpura Development Co. Ltd. v. CIT 44 ITR 362 (SC) wherein it has been held as under: 8.17 In fact in the case of Rayala Corporation (P) Ltd. (supra), it was undisputed position that assessee company had stopped its other business activities and was having only an activity with regard to the leasing its properties and earning rent therefrom and except leasing the company was not having any o…

Asiatic Stores & Soda Fountain, Mumbai vs. ITO 17(1)(2), Mumbai

In the result, both appeals filed by the assessee are allowed

ITA 6757/MUM/2017[2012-13]Status: DisposedITAT Mumbai10 Apr 2019AY 2012-13

Bench: Shri Mahavir Singh & Shri G. Manjunatha

Section 143(3)

…आयकर अपील"य अ"धकरण, मुंबई "यायपीठ, ‘ए’,मुंबई। IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES “A”, MUMBAI Before Shri MAHAVIR SINGH, Judicial Member, and Shri G. MANJUNATHA, Accountant Member ITA Nos.6757/Mum/2017 Assessment Year: 2012-13 Assessment Year: 2013-14 Asiatic Stores & Soda Fountain ITO-17(1)(2), 73, Industrial Assurance 1st Floor, Room No.116, बनाम/ Building, Veer Nariman Road, Aayakar Bhavan, Vs. Churchgate, M. K. Road, Mumbai-400020 Mumbai-400020 ("नधा"रती /Assessee) (राज"व /Revenue) P.A. No.AAAFA8467D "नधा"रती क" ओर से / Assessee by Shri Sanjay Kapadia राज"व क" ओर से / Revenue by Ms. Harkam…

Commissioner of Income Tax VIII vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 742 / 2009HC Delhi20 Mar 2019
Section 260

…assessed therein was from letting out of such properties. It was further observed that “letting out of properties is in fact the business of the Assessee.” Applying the judgment in Karanpura Development Co. Ltd. v. Commissioner of Income Tax, West Bengal 44 ITR 362 (SC), the Supreme Court held that the Assessee had rightly disclosed the income under the head „Income from Business‟ and restored the decision of the ITAT. 51.4 The said decision is distinguishable on fact in its application to the case on hand. Here the question is confined to the letting of properties forming 2019:DHC:1682-DB ITA 21…

Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 548 / 2010HC Delhi20 Mar 2019
Section 260

…assessed therein was from letting out of such properties. It was further observed that “letting out of properties is in fact the business of the Assessee.” Applying the judgment in Karanpura Development Co. Ltd. v. Commissioner of Income Tax, West Bengal 44 ITR 362 (SC), the Supreme Court held that the Assessee had rightly disclosed the income under the head „Income from Business‟ and restored the decision of the ITAT. 51.4 The said decision is distinguishable on fact in its application to the case on hand. Here the question is confined to the letting of properties forming 2019:DHC:1676-DB ITA 21…

The Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 400 / 2009HC Delhi20 Mar 2019
Section 260

…assessed therein was from letting out of such properties. It was further observed that “letting out of properties is in fact the business of the Assessee.” Applying the judgment in Karanpura Development Co. Ltd. v. Commissioner of Income Tax, West Bengal 44 ITR 362 (SC), the Supreme Court held that the Assessee had rightly disclosed the income under the head „Income from Business‟ and restored the decision of the ITAT. 51.4 The said decision is distinguishable on fact in its application to the case on hand. Here the question is confined to the letting of properties forming 2019:DHC:1677-DB ITA 21…

Commissioner of Income Tax vs. Gopal Dass Estates & Housing Pvt.Ltd

Appeals of the Revenue are dismissed

ITA - 581 / 2010HC Delhi20 Mar 2019
Section 260

…assessed therein was from letting out of such properties. It was further observed that “letting out of properties is in fact the business of the Assessee.” Applying the judgment in Karanpura Development Co. Ltd. v. Commissioner of Income Tax, West Bengal 44 ITR 362 (SC), the Supreme Court held that the Assessee had rightly disclosed the income under the head „Income from Business‟ and restored the decision of the ITAT. 51.4 The said decision is distinguishable on fact in its application to the case on hand. Here the question is confined to the letting of properties forming 2019:DHC:1680-DB ITA 21…

The Income Tax Officer, Amritsar vs. Sh. Shiv Raj Singh Bawa, Amritsar

In the result, the Revenue’s appeal is allowed and the assessee’s CO, dismissed

ITA 407/ASR/2016[2012-13]Status: DisposedITAT Amritsar30 Jan 2019AY 2012-13

Bench: Sh. Sanjay Arora & Sh. N. K. Choudhryi.T.A. No. 407/Asr/2016 Assessment Year: 2012-13

For Appellant: Sh. Charan Dass (D.R.)For Respondent: Sh. Tarun Bansal (Adv.)
Section 143(3)Section 40A(3)

…IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. No. 407/Asr/2016 Assessment Year: 2012-13 vs. Shiv Raj Singh Bawa, Income Tax Officer, c/o Bawa Steel, Ward-4(5), Amritsar G.T. Road, Amritsar [PAN: AGLPB 1944K] (Appellant) (Respondent) Cross Objection No. 11/Asr/2017 (arising out of ITA No. 407/Asr/2016) Assessment Year: 2012-13 Shiv Raj Singh Bawa, vs. Income Tax Officer, c/o Bawa Steel, G.T. Road, Ward-4(5), Amritsar Amritsar [PAN: AGLPB 1944K] (Cross Objector) (Respondent) Appellant by : Sh.…

DCIT, Cir-10(1), Kolkata vs. M/S Maa Amba Towers Ltd., Kolkata

Appeal is dismissed

ITA 1381/KOL/2015[2012-13]Status: DisposedITAT Kolkata12 Oct 2018AY 2012-13

Bench: Shri S.S.Godara & Shri, M. Balaganeshassessment Year :2012-13

Section 131Section 143(3)Section 68

…u Investment (P) Ltd Vs CIT (supra). On the contrary in the written submissions the AR relied on the decisions of the same Court rendered in the cases of Chennai Properties & Investments Ltd Vs CIT (~6 taxmann.com 465) & Karanpura Development Co. Ltd. v. CIT (44 ITR 362). I find that in the recent decision rendered on 9th April 2015 in the case of Chennai Properties & Investments Ltd Vs CIT (supra), the Apex Court considered the entire law on the subject. The Apex Court had the benefit of considering number of decisions rendered by the same Court on the issue of taxability of income derived from immovable propert…

ITO 10(2)(4), Mumbai vs. M.S. Luvish Projects (P) Ltd, Mumbai

In the result, the appeal filed by the revenue is hereby ordered to be dismissed

ITA 1247/MUM/2015[2011-12]Status: DisposedITAT Mumbai12 Oct 2018AY 2011-12

Bench: Shri G.S. Pannu, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.1247/Mum/2015 (निर्धारण वर्ा / Assessment Year: 2011-12) Ito 10(2)(4) बिधम/ M/S. M.S. Luvish Projects Room No. 213/216A, 2Nd (P) Ltd. Vs. Floor, Aayakar Bhavan, 102, Sani Armaa, Raut Lane, M.K. Road, Mumbai- Near Iscon Temple, Juhu 400020. Vile Parle (W), Mumbai-93. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaecm2300C (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) Revenue By: Shri D.G. Pansari (Dr) Assessee By: Shri Mahaveer Jain (Ar) सुनवाई की तारीख / Date Of Hearing: 23.08.2018 घोषणा की तारीख /Date Of Pronouncement: 12.10.2018 आदेश / O R D E R Per Amarjit Singh, Jm: The Revenue Has Filed The Present Appeal Against The Order Dated 12.12.2014 Passed By The Commissioner Of Income Tax (Appeals) -17, Mumbai [Hereinafter Referred To As The “Cit(A)”] Relevant To The A.Y.2011- 12. 2. The Revenue Has Raised The Following Grounds: - "1 "Whether On The Facts & In The Circumstances Of The Case & In Law, The Ld. Cit(A) Erred In Holding The Rental Receipts As Business Receipts Without Considering That The Assessee Has Received The Rent For Allowing User Of The A.Y.2011-12

For Appellant: Shri Mahaveer Jain (AR)For Respondent: Shri D.G. Pansari (DR)
Section 115JSection 143(1)Section 143(2)Section 80I

…ctivities. 9. In a very recent judgment, the Hon’ble Supreme Court in the case of ‘Chennai Properties & Investment Ltd.’ [2015] 373 ITR 673(SC) has noted that in its (Supreme court) earlier Judgment in the case of ‘Karanpura Development Co. Ltd. Vs. CIT’’ 44 ITR 362 (SC), the position of law on this issue has been summed up in the following words: - As has been already pointed out in connection with the other two cases where there is a letting out of premises and collection of rents the assessment on property basis may be correct but not so, where the letting or sub-letting is part of a trading operation. The…

Sane & Doshi Enterparises, Mumbai vs. Jt CIT 17(3), Mumbai

In the result appeal of the assessee is dismissed

ITA 998/MUM/2016[2012-13]Status: DisposedITAT Mumbai08 Aug 2018AY 2012-13

Bench: Shri Saktijit Dey & Shri Ramit Kochar

For Appellant: Shri. S.C. TiwariFor Respondent: Shri V. Justin, DR
Section 143(3)Section 24Section 48

…was no other income of the assessee except the income fromletting out of the said properties, which was the business of the assessee. On those facts, this Court came to the conclusion that judgment of this Court inKaranpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC) was applicable and the judgment of this Court in East India Housing & Land Development Trust Ltd. v. CIT [1961] 42 ITR 49 (SC) was held to be distinguishable. In the present case, we find that situation is just the reverse. The judgment in East India Housing and Land Development Trust Ltd. (supra) which would be applicable which is discussed…