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 22 Section 24 Section 132 Section 143(2)Section 14A Section 194-I Section 2(13)

Issues it is cited on

recognised provident fund section 50b section 43b(f)approved gratuity fund section 40a(9)section 211 wholly and exclusively for business section 35d slump sale section 32(1)(ii)section 24(a)domestic company

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

The ACIT, Thiruvalla vs. M/S.Muthoot Properties & Investments, Kozhencherry

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

ITA 75/COCH/2018[2005-06]Status: HeardITAT Cochin21 Feb 2019AY 2005-06

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

DCIT, Thiruvalla vs. Muthoot Properties & Investments, Kozhencherry

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

ITA 74/COCH/2018[2003-04]Status: HeardITAT Cochin21 Feb 2019AY 2003-04

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

The ACIT, Thiruvalla vs. M/S.Muthoot Properties & Investments, Kozhencherry

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

ITA 73/COCH/2018[2002-03]Status: HeardITAT Cochin21 Feb 2019AY 2002-03

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

DCIT, Thiruvalla vs. Mar Gregorious Memorial Muthoot Medical Centre, Kozhencherry

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

ITA 72/COCH/2018[2007-08]Status: HeardITAT Cochin21 Feb 2019AY 2007-08

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

DCIT, Thiruvalla vs. Mar Gregorious Memorial Muthoot Medical Centre, Kozhencherry

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

ITA 71/COCH/2018[2004-05]Status: HeardITAT Cochin21 Feb 2019AY 2004-05

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

DCIT, Thiruvalla vs. Mar Gregorious Memorial Muthoot Medical Centre, Kozhencherry

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

ITA 70/COCH/2018[2003-04]Status: HeardITAT Cochin21 Feb 2019AY 2003-04

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

Section 143(3)Section 37(1)Section 45Section 57

…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…

The ACIT, Circle-1, Thiruvalla vs. Mar Gregorious Memorial Muthoot Medical Centre, Pathanamthitta

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

ITA 69/COCH/2018[2002-03]Status: HeardITAT Cochin21 Feb 2019AY 2002-03

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

Section 143(3)Section 37(1)Section 45Section 57

…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. Agache Associates, New Delhi vs. ITO, New Delhi

Appeal of the assessee is allowed for statistical purposes,

ITA 5008/DEL/2016[2012-13]Status: DisposedITAT Delhi30 Jan 2019AY 2012-13

Bench: Shri R.K. Panda & Shri K. Narasimha Chary

For Appellant: Shri Anil Jain, AdvocateFor Respondent: Ms Ashima Neb, Sr. DR

…o.1805/Del/2018. 6. The ld. AR relied on the orders of (i) Rayala Corporation P. Ltd. vs ACIT, SC, Civil Appeal No.6437 of 2016 dt. 11.8.2016; (ii) Chennai Properties and Investment Ltd. vs CIT (2015) 373 ITR 673 (SC); (iii) Sultan Bros (P) Ltd. vs CIT (1964) 51 ITR 353 (SC); (iv) New Savan Sugar & Gur Refining Co. Ltd. (1969) 74 ITR 7 (SC); and (v) CIT vs Shambhu Investments 263 ITR 143 (SC) for the proposition that intention of the taxpayer, either expressed or gathered from the circumstances, may provide a guiding test that the income arising from letting out of the property would be treated as “business incom…

M/S. Onkareshwar Properties (P) Ltd., New Delhi vs. Addl. CIT, New Delhi

ITA 1823/DEL/2015[2011-12]Status: DisposedITAT Delhi21 Jan 2019AY 2011-12

Bench: Shri Amit Shukla & Shri L.P. Sahu

For Appellant: Shri Rajesh Jain, CAFor Respondent: Shri Shailesh Kumar, Sr.DR

Section 143(3)Section 14ASection 40

…f Association has an object clause to carry on the business of the real 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, 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

…ct clause of its Memorandum. The Hon’ble Supreme Court distinguished the decisions of its earlier co-ordinate Bench in the case of East India Housing & Land Development Trust Ltd vs CIT reported in 42 ITR 49 (SC) and Sultan Brothers (P) Ltd vs CIT reported in 51 ITR 353 (SC) . Instead the Supreme Court followed the law laid down in the decision by the same court in Karampura Development Co. Ltd vs CIT reported in 44 ITR 362 (SC). In the aforesaid case, the assessee was formed with the purpose of acquiring and disposing coal mining rights. In pursuance of its objective, the assessee had acquired long term leases o…

ACIT CC 3(4) Cen RG 3, Mumbai vs. Samir Narian Bhojwani, Mumbai

In the result, appeal filed by the revenue is hereby dismissed and the cross-objection filed by the assessee is hereby ordered to be dismissed

ITA 331/MUM/2015[2009-10]Status: DisposedITAT Mumbai12 Oct 2018AY 2009-10

Bench: Shri Shamim Yahya, Am & Shri Amarjit Singh, Jm आयकर अपील सं/ I.T.A. No.331/Mum/2015 (निर्धारण वर्ा / Assessment Year: 2009-10) बिधम/ Acit-Cc-3(4) Central Shri Samir Narain Bhojwani 1St Floor, Samir Complex, St. Range-3 Vs. Andrews Road, Opp, Holy Room No. 401, 4Th Floor, Family Hospital, Bandra Aayakar Bhavan, Mumbai- (W), Mumbai-400050. 400020. Co. No.134/Mum/2016 (Arising Out Of Ita. No. 331/Mum/2015) (निर्धारण वर्ा / Assessment Year: 2009-10) बिधम/ Shri Samir Narain Bhojwani Acit-Cc-24 & 26 1St Floor, Samir Complex, St. Room No. 401, 4Th Floor, Vs. Andrews Road, Opp, Holy Aayakar Bhavan, Mumbai- Family Hospital, Bandra 400020. (W), Mumbai-400050. स्थायी लेखा सं./जीआइआर सं./Pan/Gir No. :Aabpb9150H (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) आयकर अपील सं/ I.T.A. No.6807/Mum/2014 (निर्धारण वर्ा / Assessment Year: 2010-11) बिधम/ Acit Cc-24 & 26 Central Shri Samir Narain Bhojwani 1St Floor, Samir Complex, St. Range-5 Vs. Andrews Road, Opp. Holy Room No.404, 4Th Floor Family Hospital, Bandra Aayakar Bhavan, Mumbai- (W), Mumbai-400050. 400020. Co. No.41/Mum/2016 (Arising Out Of Ita. No. 6153/Mum/2014) (निर्धारण वर्ा / Assessment Year: 2009-10) बिधम/ Shri Samir Narain Bhojwani Acit Cc-24 & 26 Central 1St Floor, Samir Complex, St. Range-5 Vs. Andrews Road, Opp. Holy Room No.404, 4Th Floor Family Hospital, Bandra Aayakar Bhavan, Mumbai-

For Appellant: Shri Yogesh TharFor Respondent: Shri R. Manjunatha

Section 132Section 139(1)Section 143(2)Section 153A

…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…

ACIT - 5(3)(2), Mumbai vs. Xtp Design Furniture Ltd., Chennai

In the result, appeal filed by the Revenue is dismissed

ITA 717/MUM/2017[2012-13]Status: DisposedITAT Mumbai25 Sept 2018AY 2012-13

Bench: Shri B.R. Baskaran (Am) & Shri Ravish Sood(Jm)

…the head ‘income from house property’. In A.Y. 2010-11, the assessee has placed reliance on the decision rendered by Hon'ble Supreme Court in the case of Shambhu Investment Private Limited (263 ITR 143) and also in the case of Sultan Brothers Private Limited (51 ITR 353) to support its view. Accordingly, the Tribunal in A.Y. 2010-11 also has held that the amount received towards amenities is assessable under the head ‘income from house property’. 4. On the contrary, learned DR took support of the decision rendered by Hon'ble Kolkata High Court in the case of CIT Vs. Model Manufacturing Co. Pvt. Ltd.(175 ITR 374)…

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

…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…

Ambattur Infra Developers, Chennai vs. ACIT Non Corporate Circle 7(1), Chennai

In the result, the appeals of the assessee are allowed

ITA 689/CHNY/2018[2013-14]Status: DisposedITAT Chennai01 Aug 2018AY 2013-14

Bench: Shri N.R.S. Ganesan & Shri Abraham P. George] आयकर अपील सं./I.T.A. Nos.689 & 690/Chny/2018 "नधा"रण वष" /Assessment Year : 2013-14 & 2014-15. Ambattur Infra Developers, Vs. The Assistant Commissioner No.86, E-2, Industrial Estate, Of Income Tax, Ambattur, Non Corporate Circle 7(1), Chennai 600 058. Chennai.

For Appellant: Ms. B. Jaisheila, C.AFor Respondent: Shri. Sailendra Mamidi, PCIT

…t. Ltd vs. ACIT, (2016) 386 ITR 500. ITA Nos.689 & 690/18 :- 4 -: 4. However, ld.CIT(A) was not appreciative of the above contentions. According to him, by virtue of the judgment of Hon’ble Apex Court in the case of Sultan Brothers Pvt. Ltd vs. CIT (1964) 51 ITR 353, East India Housing & Land Development Trust Limited, (1961) 42 ITR 49, Karnani Properties Limited vs. CIT, (1971) 82 ITR 547 and S.G. Mercantile Corporation Private Limited vs. CIT, (1972) 83 ITR 700, even if the object of an assessee was to promote and develop a market on his landed property, income therefrom would be assessable under the he…

M/S.Oberon Edifices & Estates P. Ltd, Kochi vs. The Pr.CIT, Trivandrum

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

ITA 361/COCH/2017[2013-14]Status: DisposedITAT Cochin23 Jul 2018AY 2013-14

Bench: S/Shri Chandra Poojari, Am & George George K., Jm I.T.A. No. 361/Coch/2017 Assessment Year : 2013-14 M/S. Oberon Edifices & Estates Vs. The Principal Commissioner Of Pvt. Ltd., Oberon Mall, Income-Tax, Trivandrum. Nh Bye-Pass, Edapally, Kochi-682 024. [Pan:Aaaco 7942E]

…ns of business". The Ld. AR also relied on the recent decision of the Kerala High Court in the case of Palmshore Hotels (P) Limited (ITA No 83 of 2013) wherein the dictum of the Constitutional Bench in the case of Sultan Brothers Private Limited Vs CIT (1964) 51 ITR 353 which states that "each case has to be looked at from the businessman's point of view to find out whether the letting was the doing of a business or the exploitation of the property by an owner. This being the test indicated by the Apex Court, according to us, the controversy should be resolved in the context of the intention of the parties as ref…

Elcome Properties P.Ltd, Navi Mumbai vs. DCIT 10(3), Mumbai

The appeals are disposed of in terms of the aforesaid order in Civil Appeal No

ITA 82/MUM/2016[2011-12]Status: DisposedITAT Mumbai15 May 2018AY 2011-12

Bench: Shri Joginder Singh & Shri Manoj Kumar Aggarwalassessment Year: 2011-12 Elcome Properties Private Ltd. Dcit-10(3), 901/902, 9Th Floor, Great Aayakar Bhavan, बनाम/ Eastern Summit A, Plot No.56, Queens Road, Vs. Sector No.15, Cbd Belapur, Mumbai Navi Mumbai-400614 ("नधा"रती /Assessee) (राज"व /Revenue) Pan. No. Aabce8665M

…old the properties known as "Chennai House" and "Firhavin Estate" both in Chennai and to let out those properties as well as make advances upon the security of lands and buildings or other properties or any interest therein. What we emphasise is that * [1964] 51 ITR 353 (SC). holding the aforesaid properties and earning income by letting out those properties is the main objective of the company. It may further be recorded that in the return that was filed, the entire income which accrued and was assessed in the said return was from letting out of these properties. It is so recorded and accepted by the Assessing O…

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

In the result, the appeal of the revenue is dismissed

ITA 1309/KOL/2015[2012-2013]Status: DisposedITAT Kolkata23 Mar 2018AY 2012-2013

Bench: Hon’Ble Shri Aby. T. Varkey, Jm & Shri M.Balaganesh, Am ] I.T.A No. 1309/Kol/2015 Assessment Year : 2012-13 Dcit, Circle-10(1), Kolkata -Vs- M/S Maa Amba Infrastructure (P) Ltd. [Pan: Aaecm 6507 F] (Appellant) (Respondent)

For Appellant: Shri Saurabh Kumar, Addl. CIT Sr. DRFor Respondent: Shri Akkal Dudhewala, AR

Section 143(3)Section 22

…ct clause of its Memorandum. The Hon’ble Supreme Court distinguished the decisions of its earlier co-ordinate Bench in the case of East India Housing & Land Development Trust Ltd vs CIT reported in 42 ITR 49 (SC) and Sultan Brothers (P) Ltd vs CIT reported in 51 ITR 353 (SC) . Instead the Supreme Court followed the law laid down in the decision by the same court in Karampura Development Co. Ltd vs CIT reported in 44 ITR 362 (SC) . In the aforesaid case, the assessee was formed with the purpose of acquiring and disposing coal mining rights. In pursuance of its objective, the assessee had acquired long term leases…

M/Sviswarupa Builders and Developers P Ltd/ vs. Income Tax Officer, Ward/3(I) Hyderabad

ITTA/151/2005HC Telangana22 Nov 2017

Bench: C.V.NAGARJUNA REDDY,T.AMARNATH GOUD

For Appellant: Mr. A.V.A. SivaFor Respondent: Mr. B. Narasimha Sarma

…e Tribunal, we do not find any error in order to interfere with it. Admittedly, there are no separate agreements for rental income and maintenance charges. On the facts of the case, it cannot be 1 [1964] 51 ITR 353 (SC) 2 [2003] 263 ITR 143 (SC) CVNR, J & TA, J ITTA Nos.59 of 2005 and batch 6 disputed that the maintenance of flats was undertaken by the assessee in connection with the letting out of the apartments to the lessees. When the rentals, which are the main source of income, are treated as not falling under the head “business source”, it…

Golcha Minerals Pvt. Ltd., Jaipur vs. ITO, Jaipur

In the result, the appeal of the assessee is allowed for statistical

ITA 1137/JPR/2016[2012-13]Status: DisposedITAT Jaipur17 Nov 2017AY 2012-13

Bench: The Itat By Taking Following Grounds Of Appeal:

For Appellant: Shri A.B. Dangyach (CA)For Respondent: Shri P.R. Meena (Addl.CIT)

…quire properties and earn income by letting out same, said income was to be brought to tax as business income and not as income from house property. The Hon’ble Apex Court also referred to Constitution bench decision of Sultan Brothers (P.) Ltd. v. CIT [1964] 51 ITR 353 (SC) and noted as under: ‘‘10. No doubt in Sultan Brothers (P.) Ltd.'s case (supra), Constitution Bench judgment of this Court has clarified that merely an entry in the object clause showing a particular object would not be the determinative factor to arrive at an conclusion whether the income is to be treated as income from business and such a qu…

Lake View Developers, Mumbai vs. Addl CIT RG 12(3), Mumbai

In the result, the appeal is dismissed

ITA 989/MUM/2015[2010-11]Status: DisposedITAT Mumbai15 Nov 2017AY 2010-11

Bench: Shri Mahavir Singh () & Shri N.K. Pradhan () Assessment Year: 2010-11

For Appellant: NoneFor Respondent: Mr. Rajesh Kumar Yadav, DR

Section 10Section 12Section 143(3)Section 57Section 6Section 9

…of income assessable under the said head of income, the same violates the well settled law as explained by the Hon’ble Apex Court time and again, and toward which we may reproduce from its constitution bench decision in Sultan Brothers (P.) Ltd. vs.CIT [1964] 51 ITR 353 (SC): ‘The several heads of income mentioned in section 6 of the Income Tax Act, 1922, and dealt with separately in sections. 7 to 12 are mutually exclusive, each head being specific to cover the income arising from a particular source, and it cannot be said that any one of these sections is more specific than another. Therefore, a particular vari…