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 366,005 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

Sea Scan Marine Services P. Ltd, Goa vs. DCIT CC-9, Mumbai

In the result appeal of the assessee is dismissed

ITA 7086/MUM/2014[2010-11]Status: DisposedITAT Mumbai08 Mar 2017AY 2010-11

Bench: Shri B.R. Baskaran & Shri Pawan Singhm/S Sea Scan Marine Services Dcit Cc-9, Pvt. Ltd., Fire Services Old Cgo Building, Compound, St. Inez Panaji, Vs. Mumbai-400020 Goa-403001 Pan: Aadcs4236J (Appellant) (Respondent)

For Appellant: Shri Amar Gahlot (AR)For Respondent: Shri Akhilendra Jadav (DR)
Section 143(3)Section 24Section 253Section 254(1)

…ssion, the ld. AR of the assessee relied upon the following decisions: 1. United Commercial Bank Ltd. Vs. CIT [1975] 32 ITR 688 (SC). 2. East India Housing and Land Development Trust Ltd. [1961] 42 ITR 49 (SC). 3. Karanpura Development Co. Ltd. Vs. CIT [1962] 44 ITR 362(SC). 4. Sultan Brothers (P) Ltd. Vs CIT [1964] 51 ITR 353 (SC). 5. Chennai Properties & Investments Ltd. vs. CIT [2015] 373 ITR 673. 6. Abdul Qayume Vs. CIT [1990] 50 Taxman 171 (All). 7. Profile Consultancy Services (P) Ltd. Vs CIT [2016] 161 296 (Mumbai-Trib.). 4. On the other hand, ld. DR for the Revenue supported the order of authorities below…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3644/MUM/2013[2003-04]Status: DisposedITAT Mumbai18 Nov 2016AY 2003-04

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3643/MUM/2013[2002-03]Status: DisposedITAT Mumbai18 Nov 2016AY 2002-03

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3642/MUM/2013[2001-02]Status: DisposedITAT Mumbai18 Nov 2016AY 2001-02

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3641/MUM/2013[2000-01]Status: DisposedITAT Mumbai18 Nov 2016AY 2000-01

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3640/MUM/2013[1999-00]Status: DisposedITAT Mumbai18 Nov 2016AY 1999-00

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

Ashok Vatika P.Ltd, Mumbai vs. ITO 10(3)(4), Mumbai

In the result, appeals of the assessee are allowed in part for statistical purposes

ITA 3639/MUM/2013[1998-99]Status: DisposedITAT Mumbai18 Nov 2016AY 1998-99

Bench: Shri R.C.Sharma, Am & Shri Ravish Sood, Jm

Section 139Section 143(1)Section 143(3)Section 147Section 148

…liable to be assessed as business income. 7. Hon’ble Supreme Court in the case of Chennai Property (supra), after considering its earlier judgment of Supreme Court in the case of Sultan Brothers Pvt. Ltd., CA No.4494/2004, and Karanpura Development Co. Ltd., 44 ITR 362 held that where holding of property and earning of income by letting out those property is in main business of the assessee, the income arising thereon is liable to be assessed under the head income from business and cannot be treated as income from house property. 8. In view of the decision of the Hon’ble Supreme Court in the case of Chennai Prop…

City Centre Mall Nashik P.Ltd, Mumbai vs. DCIT 6(2) (Now Asst CIT 6(2)), Mumbai

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes

ITA 1783/MUM/2015[2010-11]Status: DisposedITAT Mumbai23 Sept 2016AY 2010-11

Bench: Shri B.R. Baskaran (Am) & Shri Amarjit Singh (Jm)

Section 14ASection 43B

…he learned counsel appearing for the assessee, the afore-stated judgment in the case of Chennai Properties (supra) has referred to all the judgments on the subject and more particularly, the judgment in the case of Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC) which has summed up as under:- 6 City Centre Mall Nashik Pvt. Limited “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 dividi…

M/S Rayala Corp. Pvt Ltd vs. Assistant Commissioner of Income Tax, Che

C.A. No.-006437-006437 - 2016Supreme Court11 Aug 2016

…earned counsel appearing for the assessee, the afore-stated judgment in the case of Chennai Properties (supra) has referred to all the judgments on the subject and more particularly, the judgment in the case of Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC) which has summed up as under:- “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 dividing line is difficult to find; but…

M/S Rayala Corp. Pvt Ltd vs. Assistant Commissioner of Income Tax, Che

C.A. No.-006437-006437 - 2016Supreme Court11 Aug 2016

…earned counsel appearing for the assessee, the afore-stated judgment in the case of Chennai Properties (supra) has referred to all the judgments on the subject and more particularly, the judgment in the case of Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC) which has summed up as under:- “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 dividing line is difficult to find; but…

ACIT Cir 12(3), Mumbai vs. Lake View Developers, Mumbai

In the result, the Revenue’s appeal is allowed

ITA 4495/MUM/2013[2009-10]Status: DisposedITAT Mumbai28 Jul 2016AY 2009-10

Bench: Shri Sanjay Arora, Am & Shri Ram Lal Negi, Jm आयकर अपील सं./I.T.A. No.3409/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Lake View Developers Addl. Cit, Range 12(3), बनाम/ 514, Dalamal Towers, Mumbai 211 F.P.J. Marg, Nariman Point, Vs. Mumbai-400 021 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafl 0589 R (Assessee) : (Revenue) & आयकर अपील सं./I.T.A. No. 4495/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) बनाम/ Addl. Cit, Range 12(3), Lake View Developers Mumbai Mumbai-400 021 Vs. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafl 0589 R (Revenue) (Assessee) : & आयकर अपील सं./I.T.A. No. 4496/Mum/2013 ("नधा"रण वष" / Assessment Year: 2009-10) Addl. Cit, Range 12(3), Omega Associates, बनाम/ Mumbai 514, Dalamal Tower, 211-F.P.J. Marg, Nariman Point, Vs. Mumbai-400 021 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaafl 0589 R (Revenue) : (Assessee) : Shri Chetan Karia Revenue By Assessee By : Shri R. P. Rastogi सुनवाई क" तार"ख / : 03.5.2016 Date Of Hearing घोषणा क" तार"ख / : 28.7.2016 Date Of Pronouncement

For Appellant: Shri R. P. Rastogi
Section 143(3)Section 22

…ates by the Revenue in-as-much as there is no scope for allowance of depreciation against rental income. Aggrieved, the assessee is in second appeal. 4. Before us, the ld. Authorized Representative (AR) relied on Karanpura Development Co. Ltd. vs. CIT [1962] 44 ITR 362 (SC); CIT vs. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC); Rajasthan State Warehousing Corporation vs. CIT [2000] 242 ITR 450 (SC); and CIT vs. Chugandas & Co. [1965] 55 ITR 17 (SC). The ld. Departmental Representative (DR), besides seeking to distinguish the said reliance, relied on East India Housing & Land Development Trust Ltd. vs. CI…

Commissioner of Income Tax Delhi vs. M/S Ansal Housing & Construction

ITA/442/2003HC Delhi26 Jul 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE NAJMI WAZIRI

Section 22

…Ansal Housing Finance & Leasing Co. Ltd. (supra) this Court negatived both the above submissions of the Assessee. After discussing the decisions of the Supreme Court in Sultan Bros.(P) Ltd. v. CIT (supra) and Karan Pura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC), this Court noted that the levy of income tax in the case of one holding house property is premised not on whether the Assessee carries on business as landlord, but on ownership. It was further observed as under: “.....The capacity of being an owner was not diminished one whit, because the assessee carried on business of developing, buil…

The Commissioner of Income Tax III vs. Sri Ravi Sanghi

ITTA/168/2010HC Telangana23 Jun 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

Keyaram Developers and Hotels P Ltd., Chennai vs. ACIT, Chennai

In the result, I.T.A. No.402/Mds/2013 is dismissed

ITA 2216/CHNY/2015[2009-10]Status: DisposedITAT Chennai01 Jun 2016AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.402/Mds/2013 "नधा"रण वष" / Assessment Year : 2003-04

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Sh. P. Radhakrishnan, JCIT

…ership of the land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. After referring to the judgments of Privy Council and the judgment of Apex Court in Karanpura Development Co. Ltd. v. CIT (1962) 44 ITR 362, the Apex Court found that income from letting out the commercial complex was the business of the assessee. Therefore, the rental income has to be assessed as income from business. In view of this judgment of Apex Court, according to the Ld. counsel, the earlier judgments of Madras High Court in the assessee's own case for assessment year 2001-…

Keyaram Developers and Hotels P Ltd., Chennai vs. ACIT, Chennai

In the result, I.T.A. No.402/Mds/2013 is dismissed

ITA 2215/CHNY/2015[2006-07]Status: DisposedITAT Chennai01 Jun 2016AY 2006-07

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.402/Mds/2013 "नधा"रण वष" / Assessment Year : 2003-04

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Sh. P. Radhakrishnan, JCIT

…ership of the land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. After referring to the judgments of Privy Council and the judgment of Apex Court in Karanpura Development Co. Ltd. v. CIT (1962) 44 ITR 362, the Apex Court found that income from letting out the commercial complex was the business of the assessee. Therefore, the rental income has to be assessed as income from business. In view of this judgment of Apex Court, according to the Ld. counsel, the earlier judgments of Madras High Court in the assessee's own case for assessment year 2001-…

Keyaram Hotels Private Limited, Chennai vs. DCIT, Chennai

In the result, I.T.A. No.402/Mds/2013 is dismissed

ITA 1095/CHNY/2014[2010-11]Status: DisposedITAT Chennai01 Jun 2016AY 2010-11

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.402/Mds/2013 "नधा"रण वष" / Assessment Year : 2003-04

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Sh. P. Radhakrishnan, JCIT

…ership of the land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. After referring to the judgments of Privy Council and the judgment of Apex Court in Karanpura Development Co. Ltd. v. CIT (1962) 44 ITR 362, the Apex Court found that income from letting out the commercial complex was the business of the assessee. Therefore, the rental income has to be assessed as income from business. In view of this judgment of Apex Court, according to the Ld. counsel, the earlier judgments of Madras High Court in the assessee's own case for assessment year 2001-…

DCIT, Chennai vs. Keyaram Hotel Pvt. Ltd., Chennai

In the result, I.T.A. No.402/Mds/2013 is dismissed

ITA 402/CHNY/2013[2003-04]Status: DisposedITAT Chennai01 Jun 2016AY 2003-04

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.402/Mds/2013 "नधा"रण वष" / Assessment Year : 2003-04

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Sh. P. Radhakrishnan, JCIT

…ership of the land or leases but the nature of the activity of the assessee and the nature of the operations in relation to them. After referring to the judgments of Privy Council and the judgment of Apex Court in Karanpura Development Co. Ltd. v. CIT (1962) 44 ITR 362, the Apex Court found that income from letting out the commercial complex was the business of the assessee. Therefore, the rental income has to be assessed as income from business. In view of this judgment of Apex Court, according to the Ld. counsel, the earlier judgments of Madras High Court in the assessee's own case for assessment year 2001-…

M/S. D.B.S. Financial Services P. Ltd vs. The ACIT Cir 3(1)

In the result, the appeals filed by the Revenue are dismissed and the appeals filed by the assessee are partly allowed for statistical purpose

ITA 2144/MUM/2004[1993-1994]Status: DisposedITAT Mumbai23 Mar 2016AY 1993-1994

Bench: Shri C.N. Prasad & Shri Ashwani Tanejaआयकर अपील सं /I.Ta No.2269/Mum/2004 ("नधा"रण वष" / Assessment Year: 1993-94 आयकर अपील सं /I.Ta No.3543/Mum/2004 ("नधा"रण वष" / Assessment Year: 1997-98 आयकर अपील सं /I.Ta No.3544/Mum/2004 ("नधा"रण वष" / Assessment Year: 1998-99 आयकर अपील सं /I.Ta No.4675/Mum/2004 ("नधा"रण वष" / Assessment Year: 1999-2000 आयकर अपील सं /I.Ta No.314/Mum/2008 ("नधा"रण वष" / Assessment Year: 2004-05 बनाम/ The Dy. Commissioner Of M/S. Dbs Financial Services Income Tax, Range 3(1), Pvt. Ltd., Vs. Aayakar Bhavan, Raheja Chambers, 2Nd Floor, Mumbai-400 020 213, Nariman Point, Mumbai-400 021 आयकर अपील सं /I.Ta Nos.2144 To 2146 & 3541/Mum/2004 "नधा"रण वष"/ Assessment Years:1993-94 To 1995-96&1997-98 बनाम/ M/S. Dbs Financial The Dy. Commissioner Of Services Pvt. Ltd., Income Tax, Range 3(1), Vs. Raheja Chambers, 2Nd Aayakar Bhavan, Floor, Mumbai-400 020 213, Nariman Point, Mumbai-400 021 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. Aaacd 0540P (अपीलाथ" /Applicant) (""यथ" / Respondent) .. अपीलाथ" ओर से/ Department By: Shri Niraj Sheth

For Appellant: Shri Ashish HeliwalFor Respondent: Shri Niraj Sheth

…“Income from Business”. While coming to such conclusion, the Hon’ble Supreme Court had considered the Constitutional Bench decision in the case of Sultan Brothers Pvt. Ltd. Vs CIT (supra) and the decision in the case of Karanpura Development Co. Ltd., Vs CIT (44 ITR 362). 10. The Co-ordinate Bench, in the case of the assessee for the assessment year 1996-97 in ITA Nos. 1853 & 1814/M/2001 dated 10th August, 2012, in para-22, it was held that the receipts against letting out the space in the property demonstrate the primary object of the assessee was to let out the property to the occupants and therefore the same…

Commissioner of Income Tax Delhi-XI vs. Indian National Congress/All India Congress Committee

ITA/145/2001HC Delhi23 Mar 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 139Section 13A

…(MP) and submitted that voluntary contributions received by a political party was income under Section 2(24) of the Act and was a revenue receipt. Reliance was placed on the decisions in Karanpura Development Co. Ltd. v. Commissioner of Income Tax (1962) 44 ITR 362 (SC) and Aroon Purie v CIT. (2015) 375 ITR 188 (Del). 68. Mr Singh submitted that whether a receipt is income or not is a mixed question of fact or law and the matter ought to be remanded to the ITAT to call for and examine the complete books and decide the question afresh. Interpreting Section 13A 69. Section 2(15) of the Act defines…

Indian National Cong. (I) Aicc vs. C.I.T.- XI

ITA/180/2001HC Delhi23 Mar 2016

Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE VIBHU BAKHRU

Section 139Section 13A

…(MP) and submitted that voluntary contributions received by a political party was income under Section 2(24) of the Act and was a revenue receipt. Reliance was placed on the decisions in Karanpura Development Co. Ltd. v. Commissioner of Income Tax (1962) 44 ITR 362 (SC) and Aroon Purie v CIT. (2015) 375 ITR 188 (Del). 68. Mr Singh submitted that whether a receipt is income or not is a mixed question of fact or law and the matter ought to be remanded to the ITAT to call for and examine the complete books and decide the question afresh. Interpreting Section 13A 69. Section 2(15) of the Act defines…