Sultan Bros. (P) Ltd. v. CIT

51 ITR 353Supreme Court of India1964#673 most cited

What is Sultan Bros. (P) Ltd. v. CIT authority for?

Income derived from letting out property is classified as business income only if the letting activity constitutes a business from a businessman's perspective, rather than mere exploitation of property by an owner. The company's object clause is not the sole determinative factor in this assessment.

148

judgments rely on this decision, according to BharatTax’s citation analysis of 366,005 Indian tax judgments — from 2009 to 2026.

Also referred to as

Sultan Bros. (P) Ltd. v. CIT · Section 22 · Section 2(13) · income from letting property · business income · income from house property · businessman's point of view · object clause · exploitation of property · commercial asset definition

Also reported as

5 SCR 807

Sections most often in play

Section 143(3)Section 22Section 24Section 132Section 143(2)Section 14ASection 194-ISection 2(13)

Issues it is cited on

recognised provident fundsection 50bsection 43b(f)approved gratuity fundsection 40a(9)section 211wholly and exclusively for businesssection 35dslump salesection 32(1)(ii)section 24(a)domestic company

Judgments citing Sultan Bros. (P) Ltd. v. CIT

Telekon Media India Pvt. Ltd., Delhi vs. ITO, Ward- 25(2), New Delhi

In the result, the appeal of the assessee is dismissed

ITA 5352/DEL/2019[2012-13]Status: DisposedITAT Delhi21 Jul 2020AY 2012-13

Bench: Shri Bhavnesh Saini & Shri O.P. Kant

Section 143(3)Section 24Section 263

…d Assessing Officer rejected the contention of the assessee that leasing of plant, machinery furniture was incidental to the letting of the building in view of the decision of the Hon’ble Supreme Court in the case of Sultan Brothers (P) Ltd. versus CIT (1964) 51 ITR 353(SC). The Learned Assessing Officer accordingly disallowed the standard deduction claimed under section 24 (a) of the Act at the rate of the 30% i.e. amounting to ₹ 6,75,000/- from the rental income of ₹ 22,50,000/- and assessed the rental income of Rs.22,50,000/-under the head “income from other sources” as against claim of the assessee under the…

Rohit Kapur, New Delhi vs. ACIT, Special Range-8, New Delhi

The appeal of the assessee stands allowed

ITA 9016/DEL/2019[2016-17]Status: DisposedITAT Delhi01 Jul 2020AY 2016-17

Bench: Shri G.S. Pannu & Shri Sudhanshu Srivastavash. Rohit Kapur Add. Cit, 3,The Green Rajokri Special Range-8, New Delhi-110038 Vs. New Delhi Pan –Aslpk 1411C (Appellant) (Respondent)

Section 57

…ACIT and rooms services charges etc. Thus, evidently, the Revenue is being generated for each Hotel Unit without the active participation of the unit owners. 6.2 The Hon’ble Apex Court in the case of Sultan Brothers (Pvt.) Ltd. vs. CIT reported in [1964] 51 ITR 353 (SC) was considering an issue to decide the appropriate head for taxing the income i.e., whether the income was covered under income from business or profession or income from other sources. In this case, the assessee had constructed a building fully furnished and had let out the same to another person for use as a Hotel. The assessee never car…

M/S Mlc Properties LLP, Bangalore vs. Deputy Commissioner of Income Tax Circle-1(2)(1), Bangalore

In the result, the appeal of the assessee is allowed

ITA 758/BANG/2019[2015-16]Status: DisposedITAT Bangalore06 Mar 2020AY 2015-16

Bench: Shri Arun Kumar Garodia, Am & Shri Pavan Kumar Gadale, Jm Assessment Year : 2015 – 16 M/S Mlc Properties Llp, Tower – D, The Millennia, Vs. Dcit, Circle – 1 (2) (1), Murphy Road, Ulsoor, Bengaluru Bengaluru - 560008 Pan : Bhkpm3338N Appellant Respondent Assessee By : Shree V. Srinivasan, Advocate Revenue By : Smt. R. Premi, Jcit Dr Date Of Hearing : 25.02.2020 Date Of Pronouncement : 06.03.2020

For Appellant: Shree V. Srinivasan, AdvocateFor Respondent: Smt. R. Premi, JCIT DR

…estment Limited vs. CIT (Supra) followed by the AO in the present case. He pointed out that in that case, Hon’ble apex court referred to the judgment of the Constitution Bench of Hon’ble Apex Court rendered in the case of Sultan Bros. Pvt. Ltd. as reported in 5 SCR 807 in which, it was held that each case has to be looked at from a Businessman’s point of view to find out whether the letting was the doing of a business or exploitation of his property by an owner. He pointed out this was also held in that case that it is not possible to say that a particular activity is business because it is concerned with an asse…

Falcon Vincon Private Limited, Bengaluru vs. Pr.CIT-3, Kolkata

In the result, the appeal of the assessee is allowed

ITA 1159/KOL/2019[2014-15]Status: DisposedITAT Kolkata07 Feb 2020AY 2014-15

Bench: Shri A. T. Varkey, Jm & Dr. A.L. Saini, Am Falcon Vincon Private Limited Vs. Pr. Cit-3, Kolkata 102, Tower No.12, Shriram Sameeksha, New Gangamma Gudi Police Station Road, Naidu Layout, Bengaluru "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aabcf3203C (अपीलाथ" /Appellant) (""यथ" / Respondent) ..

For Appellant: Shri A. K. Tibrewal, FCAFor Respondent: Dr. P. K. Srihari, CIT(DR)
Section 143(3)Section 263Section 263(3)

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7. … We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is onl…

M/S Popular Finance Company, Pathanamthitta vs. The ACIT, Cir-1, Thiruvalla

In the result, the appeals of the Revenue are partly allowed for statistical purposes

ITA 204/COCH/2019[2014-15]Status: DisposedITAT Cochin03 Dec 2019AY 2014-15

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 143(2)Section 143(3)Section 263Section 37(1)

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7.... We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is o…

M/S.Popular Finance, Pathanamthitta vs. The ACIT, Circle-1, Thiruvalla

In the result, the appeals of the Revenue are partly allowed for statistical purposes

ITA 203/COCH/2019[2014-15]Status: DisposedITAT Cochin03 Dec 2019AY 2014-15

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 143(2)Section 143(3)Section 263Section 37(1)

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7.... We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is o…

M/S Popular Finance Company, Pathanamthitta vs. The ACIT, Cir-1, Thiruvalla

In the result, the appeals of the Revenue are partly allowed for statistical purposes

ITA 202/COCH/2019[2014-15]Status: DisposedITAT Cochin03 Dec 2019AY 2014-15

Bench: S/Shri Chandra Poojari, Am & George George K., Jm

Section 143(2)Section 143(3)Section 263Section 37(1)

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7.... We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is o…

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

In the result, the appeal filed by assessee in ITA

ITA 2263/CHNY/2018[2009-10]Status: DisposedITAT Chennai21 Nov 2019AY 2009-10

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

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7. … We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is onl…

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

…rminative factor to arrive at a conclusion that the income is to be treated as income from business. Such a question would depend upon the circumstances of each case. It is so held by the Constitution Bench of this Court in Sultan Bros. (P) Ltd. v. CIT [1964] 51 ITR 353 (SC) and we reproduce the relevant portion thereof: "7. … We think each case has to be looked at from a businessman's point of view to find out whether the letting was the doing of a business or the exploitation of his property by an owner. We do not further think that a thing can by its very nature be a commercial asset. A commercial asset is onl…

Nimesh Dhiraj Lal Vora, Mumbai vs. ACIT, WD- 17 (2), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 4989/MUM/2018[2013-14]Status: DisposedITAT Mumbai01 Nov 2019AY 2013-14

Bench: Shri Shamim Yahya (A.M.) & Shri Pawan Singh (Jm) Nimesh Dhirajlal Vora Vs Acit, Wd.17(2), Flat No.26, 6Th Floor, Room No. 123A, Neemchhaya Joshi Lane Aayakar Bhawan, Ghatkopar (East), Mumbai- Maharshi, Karve Road, 400 077 Mumbai-400020 Pan : Aacpv5956C Appellant Respondednt

Section 142(1)Section 143(1)Section 143(2)

…erty”, or the same were liable to be assessed as its income under the head “Other sources”, as held by the A.O, we shall advert to the guidelines laid down by a 5 judge bench of the Hon’ble Supreme Court in the case of Sultan Brothers Pvt. ltd. Vs. CIT (1964) 51 ITR 353 (SC). In the aforesaid case, it was observed by the Hon‟ble Apex Court that for answering the issue as to whether the letting out of a property along with certain amenities was to be brought to tax under the head “House Property”, three issues were to be looked into viz. (a) was it the intention in making the lease - and it matters not whether the…

DCIT, New Delhi vs. M/S. Onkareshwar Properties Pvt. Ltd., New Delhi

ITA 6049/DEL/2016[2011-12]Status: DisposedITAT Delhi18 Oct 2019AY 2011-12

Bench: Ms. Sushma Chowla & Shri Anadee Nath Misshra

For Appellant: Shri Rajesh Jain, CAFor Respondent: Ms. Paramita M. Biswas, CIT(DR)
Section 143(3)Section 14ASection 271(1)(c)Section 40

…Page 5 of 11 ITA No.- 6049/Del/2016. Onkareshware Properties Pvt. Ltd. estate. An income has to be assessed under the head as per the provisions of the Income Tax Act. " The judgment of the Honourable Supreme Court in the case of Sultan Bros (P) Ltd. vs. CIT 51 ITR 353 (SC) also supports the case of the assessee on this issue. As stated by us hereinabove, there is no material or evidence brought on record by the AO or referred to by the Ld. CIT'(A) that the land held by the assessee was not a capital asset particularly, keeping in view the fact that its statement in the books of account and the disclosure in the…

DCIT 10(3)(2), Mumbai vs. Plaza Hotels P.Ltd, Mumbai

In the result, appeal of the revenue is dismissed

ITA 3405/MUM/2017[2012-13]Status: DisposedITAT Mumbai05 Sept 2019AY 2012-13

Bench: Shri G.S. Pannu & Shri Pawan Singhdcit, 10(3)(2), Mumbai Vs Plaza Hotels Pvt Ltd 70-C, Nehru Road Vile Parle (E), Mumbai-99 Pan : Aaacp2117N Appellant Respondednt Appellant By Sh. H.N.Singh Cit-Dr & Sh. Manoj Kumar Sing Sr Dr Respondent By Sh. Arun G. Verma Date Of Hearing 05.09.2019 Date Of Pronouncement 05 -09-2019 O R D E R Per Pawan Singh: This Appeal By Revenue Is Directed Against The Order Of Cit(A)-17

Section 22Section 23

…e Hon"ble High Court has referred to the cases viz,, CEPT Vs. Shri Lakshmi Silk Mills Ltd., 20 ITR 451 (SC), CIT Vs. Calcutta National Bank Ltd., 37 ITR 171 (SC), CIT Vs. Vikram Cotton Mills Ltd., 169 ITR 597 (SC), Sultan Brothers P, Ltd. Vs. CIT, reported in 51 ITR 353 (SCJ and in case of Universal Plast Ltd, Vs. CIT, 237 ITR 454 (SC). After considering various decisions as mentioned above, the Hon"ble High Court has held that the assessee has given hotel on lease for exploiting business asset and, therefore, the Tribunal was correct in holding that the income from leasing the hotel was income from business. Fac…

Plaza Hotels Pvt. Ltd., Mumbai vs. DCIT, 10(3)(2), Mumbai

In the result, appeal of the revenue is dismissed

ITA 2863/MUM/2018[2013-14]Status: DisposedITAT Mumbai30 Aug 2019AY 2013-14

Bench: Shri R.C. Sharma & Shri Pawan Singh Ay 2013-14 Ay 2014-15

Section 14A

…e Hon"ble High Court has referred to the cases viz,, CEPT Vs. Shri Lakshmi Silk Mills Ltd., 20 ITR 451 (SC), CIT Vs. Calcutta National Bank Ltd., 37 ITR 171 (SC), CIT Vs. Vikram Cotton Mills Ltd., 169 ITR 597 (SC), Sultan Brothers P, Ltd. Vs. CIT, reported in 51 ITR 353 (SCJ and in case of Universal Plast Ltd, Vs. CIT, 237 ITR 454 (SC). After considering various decisions as mentioned above, the Hon"ble High Court has held that the assessee has given hotel on lease for exploiting business asset and, therefore, the Tribunal was correct in holding that the income from leasing the hotel was income from business. Fac…

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)

…ble and under the circumstances each and every revenue is business trading recept and has been considered accordingly. The assessee further relied upon the principle settled by the Hon’ble Supreme Court in the case of Sultan Bros. Pvt Ltd. Vs. CIT reported at 51 ITR 353. The assessee put reliance on the following case laws: (a) Mazagaon Dock Ltd vs. CIT 34 ITR 368 (SC) (b) B P Ray vs. ITO 129 295 (SC) (c) S.V. Mercantile Corpo (P) Ltd vs. CIT, 83 ITR 700 (SC) (d) CIT vs. Khostla India Ltd , 700 (SC) (e) Universal Plant Ltd, 237 ITR 454 (SC) (f) CIT Vs. Vikram Cotton Mills Ltd, 169 ITR 597 (SC) (g) Balaji Enterpr…

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)

…ble and under the circumstances each and every revenue is business trading recept and has been considered accordingly. The assessee further relied upon the principle settled by the Hon’ble Supreme Court in the case of Sultan Bros. Pvt Ltd. Vs. CIT reported at 51 ITR 353. The assessee put reliance on the following case laws: (a) Mazagaon Dock Ltd vs. CIT 34 ITR 368 (SC) (b) B P Ray vs. ITO 129 295 (SC) (c) S.V. Mercantile Corpo (P) Ltd vs. CIT, 83 ITR 700 (SC) (d) CIT vs. Khostla India Ltd , 700 (SC) (e) Universal Plant Ltd, 237 ITR 454 (SC) (f) CIT Vs. Vikram Cotton Mills Ltd, 169 ITR 597 (SC) (g) Balaji Enterpr…

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)

…3) 263 ITR 143 (SC) and CIT vs. Kanak Investment Pvt. Ltd. [1974] 95 ITR 419 (Calcutta) and also Karani Properties Limited vs. CIT (1971) 82 ITR 547 (SC). Further, Hon’ble Supreme Court 9 has also affirmed the decision of Sultan Bros. (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. CI…

Shibani S. Bhojwani, Mumbai vs. DCIT Cen Cir 3(4), Mumbai

ITA 1525/MUM/2018[2013-14]Status: DisposedITAT Mumbai31 Jul 2019AY 2013-14

Bench: Shri Saktijit Dey () & Shri N.K. Pradhan () Assessment Year: 2013-14 & Assessment Year: 2014-15

For Appellant: Mr. Yogesh A. Thar, ARFor Respondent: Mr. Chaudhary Arun Kumar Singh, Sr. DR
Section 143(3)

…ibani B. Bhojwani is liable to be assessed as ‘business income’ or under the head ‘income from house property’, clear parameters had been laid down by the constitutional bench of the Hon’ble Supreme Court in the case of Sultan Brothers (P) Ltd. Vs. CIT (1964) 51 ITR 353, wherein the Hon’ble Apex Court had observed as under:- 12. We have earlier said that s. 12 can only apply if no other section is applicable, because it deals with the residuary head of income. Now sub-s. (4) of s. 12 only deals with certain allowances and it obviously proceeds on the basis that the income mentioned in it, namely, that from the b…

DCIT CC 3(4) Ce RG 3, Mumbai vs. Samir Narain Bhojwani, Mumbai

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

ITA 1124/MUM/2017[2012-13]Status: DisposedITAT Mumbai19 Jul 2019AY 2012-13
For Appellant: Shri Yogesh A. Thar/ ChaitanyaFor Respondent: Shri Laxmi Vora Prasad Gude
Section 143(1)Section 143(2)

…d would not even think of. According to the appellant, the income from such a composite activity can never be taxed as Income from House Property', The appellant relies upon the decision of the Hon'ble Supreme Court in the case of Sultan Bros. P, Ltd. Vs. CIT 51 ITR 353 (SC). It is contended by the appellant that the decision of the Apex Court in the case of Shambhu Investments, which has been relied upon by the A.G. has not overruled the decision of the Apex Court in the case of Sultan Bros. P. Ltd. 7.6 Adverting to the assessment, order passed by the A.O., the appellant asserts that in the course of hearing of…

Devbhumi Estates (Mumbai) P. Ltd, Mumbai vs. DCIT Cir 2(1)(1), Mumbai

The appeal of the assessee is allowed for statistical purposes

ITA 649/MUM/2017[2013-14]Status: DisposedITAT Mumbai12 Jul 2019AY 2013-14

Bench: Shri Shamim Yahya & Shri Ravish Sooddevbhumi Estates Pvt. Ltd. The Deputy Commissioner Of 43, 4Th Floor, Ajaydeep Building, Income Tax, Cirlce-2(1)(1), 240 Perin Nariman Street, Vs. Aayakar Bhavan, Mumbai 400001 Mumbai.

For Appellant: Shri Dinkle Hariya &For Respondent: Shri D.G. Pansari, D.R
Section 143(2)Section 143(3)Section 14ASection 24

…erty”, or the same were liable to be assessed as its income under the head “Other sources”, as held by the A.O, we shall advert to the guidelines laid down by a 5 judge bench of the Hon’ble Supreme Court in the case of Sultan Brothers Pvt. ltd. Vs. CIT (1964) 51 ITR 353 (SC). In the aforesaid case, it was observed by the Hon‟ble Apex Court that for answering the issue as to whether the letting out of a property along with certain amenities was to be brought to tax under the head “House Property”, three issues were to be looked into viz. (a) was it the intention in making the lease - and it matters not whether the…

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

…erty has been given on rent along with car parking place and electricity supply amenities and the rent has been received inclusive of all the facilities. He relied upon the judgement of the Hon'ble Apex Court in the case of Sultan Brothers (P.) Ltd., Vs. CIT [51 ITR 353] (SC), Rayala Corporation (P.) Ltd., Vs. ACIT [386 ITR 500] (SC) and Chennai Properties and Investments Ltd., Vs. CIT [373 ITR 673] (SC) to hold that where the intention of assessee is to commercially exploit the property and the business of the assessee is to let out the properties, the income has to be treated as business income of the assessee.…