Case: East India Housing and Land Development Trust Limited Vs. Commissioner of Income Tax, West Bengal

The appellant is a private company registered under the Indian Companies Act incorporated with the objects, amongst others, (1) to buy and develop landed properties and (2) to promote and develop markets. In 1946 the appellant purchased ten bighas of land in the town of Calcutta and set up a market therein. The appellant constructed shops and stalls on platforms on that land. For the assessment yearthe appellant received Rs. 53, 145 as income from the tenants of shops and Rs. 29, 721 from the tenants or occupants of stalls. TheOfficer assessed the income derived from shops and stalls under section 9 of theAct. The order of assessment was confirmed in appeal by the Appellate Assistant Commissioner and by the Tribunal. The appellant has obtained special leave to appeal against the order of the Tribunal

Reasoning:
The appellant is undoubtedly, under the provisions of the Calcutta Municipal Act, 1951, required to obtain a licence from the Corporation of Calcutta and to maintain sanitary and other services in conformity with the provisions of that Act and for that purpose has to maintain a staff and to incur expenditure. But, on that account, the income derived from letting out property belonging to the appellant does not become "profits or gains" from business within the meaning of sections 6 and 10 of thee income received by the appellant from shops is indisputablyso is the income from stalls from occupants. The character of the income is not altered merely because some stalls remain occupied by the same occupants and the remaining stalls are occupied by a shifting class of occupants. The primary source of income from the stalls is occupation of the stalls, and it is a matter of little moment that the occupation which is the source of the income is temporary. Theauthorities were, in our judgment, right in holding that the income received by the appellant was assessable under section 9 of the