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

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

ITA - 180 / 2001HC Delhi23 Mar 2016
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…

The Commissioner of Inccome Tax-III vs. Speectra Shares AND Scrips Pvt Ltd

ITTA/282/2010HC Telangana21 Mar 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

I.T.O WD - 56(2), Kolkata vs. Salarpuria Soft Zone, Kolkata

In the result, the appeals of assessee are allowed and that of revenue are dismissed

ITA 813/KOL/2013[2009-10]Status: DisposedITAT Kolkata29 Feb 2016AY 2009-10

Bench: Shri Mahavir Singh, Jm & Shri Wasim Ahmed, Am]

For Appellant: Shri Sidharth Jhajahria, CAFor Respondent: Shri: Niraj Kumar, CIT-Dr
Section 143(3)Section 80I

…g up properties. 8. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P.) Ltd., 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…

M/S Salarpuria Soft Zone, Kolkata vs. J.C.I.T RG - 56, Kolkata

In the result, the appeals of assessee are allowed and that of revenue are dismissed

ITA 666/KOL/2013[2009-10]Status: DisposedITAT Kolkata29 Feb 2016AY 2009-10

Bench: Shri Mahavir Singh, Jm & Shri Wasim Ahmed, Am]

For Appellant: Shri Sidharth Jhajahria, CAFor Respondent: Shri: Niraj Kumar, CIT-Dr
Section 143(3)Section 80I

…g up properties. 8. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P.) Ltd., 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…

M/S Salarpuria Soft Zone, Kolkata vs. J.C.I.T RG - 56, Kolkata

In the result, the appeals of assessee are allowed and that of revenue are dismissed

ITA 665/KOL/2013[2008-2009]Status: DisposedITAT Kolkata29 Feb 2016AY 2008-2009

Bench: Shri Mahavir Singh, Jm & Shri Wasim Ahmed, Am]

For Appellant: Shri Sidharth Jhajahria, CAFor Respondent: Shri: Niraj Kumar, CIT-Dr
Section 143(3)Section 80I

…g up properties. 8. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P.) Ltd., 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…

I.T.O WD - 56(2), Kolkata vs. Salarpuria Soft Zone, Kolkata

In the result, the appeals of assessee are allowed and that of revenue are dismissed

ITA 581/KOL/2013[2008-2009]Status: DisposedITAT Kolkata29 Feb 2016AY 2008-2009

Bench: Shri Mahavir Singh, Jm & Shri Wasim Ahmed, Am]

For Appellant: Shri Sidharth Jhajahria, CAFor Respondent: Shri: Niraj Kumar, CIT-Dr
Section 143(3)Section 80I

…g up properties. 8. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P.) Ltd., 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…

DCIT, New Delhi vs. M/S Vic Enterprises Pvt. Ltd., New Delhi

ITA 2863/DEL/2010[2006-07]Status: DisposedITAT Delhi22 Dec 2015AY 2006-07

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2006-07 Deputy Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent) Assessment Year: 2008-09 Asstt. Cit, Vs. Vic Enterprises Pvt. Ltd., 4Th Floor, Punjabi Bhawan, Circle-17(1), New Delhi. 10-Rouse Avenue, New Delhi. (Pan: Aaacv0132B) (Appellant) (Respondent)

For Appellant: Shri MP Rastogi, AdvFor Respondent: Shri Sumit Chandra Sharma, CIT- DR
Section 111ASection 143(3)Section 14A

…by the special auditor. • Certain Shares are held as investment to get tax exemption u/s. 10(38). 10.2 The AO relied on the following case laws: , . • CIT vs. Associated Industrial Development Co. Ltd. 82 ITR 586 (Se) • Karampura Development Co. Ltd. Vs. CIT 44 ITR 362 (Se) • Dalmiya cements Ltd. vs. CIT 12 ITR 50 (Patna) • CIT vs. British Paints 188 ITR 44, 49 (SC). 11.1 The main contentions of the AR as gathered from the various submissions made are as under: • Shares of Dabur India Ltd. have been held as investment is by the assessee as a promoter for controlling interest for over two decades. This position w…

Padmapriya Real Estate, Chennai vs. ITO, Chennai

The appeal of the assessee is allowed for statistical purposes

ITA 2145/CHNY/2011[2002-03]Status: DisposedITAT Chennai26 Jun 2015AY 2002-03

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No.2145/Mds/2011 "नधा"रण वष" / Assessment Year : 2002-03

For Appellant: Shri T. Vasudevan, AdvocateFor Respondent: Shri N. Madhavan, JCIT
Section 143(1)Section 148

…e Assessing Officer. Referring to the judgment of the Apex Court in Chennai Properties & 3 I.T.A. No.2145/Mds/11 Investments Ltd. v. CIT (2015) (5) TMI 46, the Ld.counsel submitted that the object of the assessee-company before the Apex Court is to v. CIT (44 ITR 362), found that each case has to be decided from businessman’s point of view to find out whether letting was done as a business or exploitation of his property as owner. A commercial asset is only an asset used in a business and nothing else. The Apex Court further found that the rental income received by the assessee has to be assessed as income fr…

Ircon International Ltd vs. Deputy Commissioner of Income Tax

ITA/37/2000HC Delhi15 May 2015
Section 143(3)Section 260ASection 28

…ompensation bond. The receipt was the consideration in transfer of a capital asset under Section 2(47) of the Income Tax Act. Learned counsel relied upon the decision of the Supreme Court in Karanpura Development Co. v. Commissioner of Income Tax (1962) 44 ITR 362 to say that income is derived through a periodical monetary receipt not in the nature of a windfall but coming in with some sort of regularity or expected regularity. Such amount, however, would not include 2015:DHC:4347-DB ITA 37/2000 Page 6 fixed capital or realization of fixed capital but earning into other form of capital or mone…

M/S Chennai Properties & Invest. Ltd vs. Commr. of Income Tax Central III, T.N

The appeals are disposed of in terms of the aforesaid

C.A. No.-004494-004494 - 2004Supreme Court09 Apr 2015

…Page 1 JUDGMENT 'REPORTABLE' IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4494 OF 2004 M/S CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAI ... Appellant VERSUS THE COMMISSIONER OF INCOME TAX CENTRAL III, TAMIL NADU ...Respondent WITH CIVIL APPEAL NOS. 4491-4493 OF 2004 M/S CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAI ... Appellant VERSUS THE COMMISSIONER OF INCOME TAX, TAMIL NADU-I ...Respondent J U D G M E N T A. K. SIKRI, J. CIVIL APPEAL NO. 4494 OF 2004 The appellant-assessee is a company incorporated under the Indian Companies Act. Its main ob…

M/S Chennai Properties & Invest. Ltd vs. Commr. of Income Tax Central III, T.N

The appeals are disposed of in terms of the aforesaid

C.A. No.-004494-004494 - 2004Supreme Court09 Apr 2015

…Page 1 JUDGMENT 'REPORTABLE' IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4494 OF 2004 M/S CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAI ... Appellant VERSUS THE COMMISSIONER OF INCOME TAX CENTRAL III, TAMIL NADU ...Respondent WITH CIVIL APPEAL NOS. 4491-4493 OF 2004 M/S CHENNAI PROPERTIES & INVESTMENTS LTD., CHENNAI ... Appellant VERSUS THE COMMISSIONER OF INCOME TAX, TAMIL NADU-I ...Respondent J U D G M E N T A. K. SIKRI, J. CIVIL APPEAL NO. 4494 OF 2004 The appellant-assessee is a company incorporated under the Indian Companies Act. Its main ob…

Nigara Hotels& Buildera ( P) Ltd vs. Commissioner of Income Tax

In the result, we set aside the

ITA/43/2014HC Delhi25 Mar 2015

Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE R.K.GAUBA

Section 260

…h the licensed space has been given) was not required to render any services. 9. The appeal was allowed by the CIT(Appeals) taking note of, amongst others, the law laid down by the Supreme Court in the case of Karanpura Development Co. Ltd. v. CIT (1962) 44 ITR 362. The CIT (Appeals) noted that for scrutiny of such claim as at hand, it required to be examined as to whether the assessee could exploit the property as its owner; as to what was the dominant object of letting out the property; as to whether the income was earned as owner of the property or some further activities/services were ITA 43/20…

Commissioner of Income Tax vs. M/S. Ansal Housing Finance and Leasing Co. Ltd

The Appeals are disposed of in the above terms without any order on costs

ITA-18/1999HC Delhi31 Oct 2012

…of the Income-tax Act. It was assessable only under section 9, and it was correctly assessed under section 9 of the Income-tax Act in the course of the proceedings to assess the assessee to income-tax.” 10. In Karanpura Development Co. Ltd. vs. CIT (1962) 44 ITR 362 (SC) the Supreme Court indicated the possibility that the ownership of property and leasing it out may be done either as part of business or as land owner. The relevant observations are as follows: "Ownership of property and leasing it out may be done as a part of business, or it may be done as land-owner. Whether it is the one or the other m…

M/S.Hastalloy India Ltd vs. Dy Commissioner of Income Tax/Vizag

ITTA/22/2000HC Telangana16 Aug 2012

Bench: GODA RAGHURAM,M.S.RAMACHANDRA RAO

…r: “8. Before we refer to the Constitution Bench judgment in the case of Sultan Brothers (P) Ltd., 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…

M/s Lavish Apartment (P.) Ltd

ITA/254/2006HC Delhi23 Jul 2012
Section 72(1)

…erence to the activity of renting out properties, by a company incorporated for that purpose, it will be apposite to refer to the observations of Hidaytullah, J. (as he then was) as to the test to be applied in Karanpura Development Co. Ltd. v. CIT, (1962) 44 ITR 362: - “Ownership of property and leasing it out may be done as a part of business, or it may be done as land owner. Whether it is the one or the other must necessarily depend upon the object with which the act is done. It is not that no company can own property and enjoy it as property, whether by itself or by giving the use of it to another o…

Commissioner of Income Tax vs. M/s. Kokivenkateswara Reddy AND others

ITTA/210/2003HC Telangana21 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

Commissioner of Income Tax Delhi IV vs. D.S.Promoters & Developers P. Ltd

The Appeal is dismissed but with no orders as to costs

ITA/654/2008HC Delhi01 May 2009

Bench: HON'BLE MR. JUSTICE VIKRAMAJIT SEN,HON'BLE MR. JUSTICE RAJIV SHAKDHER

Section 22Section 260ASection 28

…held that income derived from the shops and stalls constructed by the Assessee was income received from property and did not partake of the nature of income from profits and gains from business. Karanpur Development Co. Ltd. –vs- CIT, West Bengal, [1962] 44 ITR 362 lays down that the transactions of acquiring leases and granting sub-leases are in the nature of trading within the objects of the company and not enjoyment of property as land owner. Ownership of property and leasing it out could either be as business or as a land owner and the arrangement determines in which of the two categories it falls.…