Decided on July 27,1982



T. Venkatappa, Judicial Member - (1.) SINCE common points are involved, these appeals are being disposed of together.
(2.) The assessee took the land on lease under the lease deed dated 12-7-1974 for a period of 20 years with the option to renew for a further period of 20 years. On the said land, the assessee constructed industrial sheds providing infrastructural facilities such as power, water, etc., with the object of promoting industries in the State of Karnataka and also provided consultancy services. The sheds constructed were leased out under separate lease-deeds to various persons on rental basis. The amount received from the occupants of the sheds was claimed as business income. The ITO held that the amount received from the occupants of the sheds is assessable as income from property in these two years. On appeal, the Commissioner (Appeals) upheld the same. The learned counsel for the assessee strongly urged that with the object of promoting industries in the State of Karnataka and to render such units even consultancy services, the assessee had constructed industrial estate known as 'Jai Bharath Industrial Estate', Bangalore. The assessee provided consultancy services such as technology, finance, management, selection of personnel for training, etc. The memorandum and articles of association provided for constructing of industrial estate and as such, it is a business venture. The industrial sheds have been constructed on the land which is taken on lease. The amount received from them is the rent as well as other services rendered (sic). Thus, the amount received from the occupants of the industrial sheds is assessable as business income but not as income under the head 'Property'. The learned departmental representative submitted that the industrial sheds are nothing but a building and the rent received from the occupants is assessable as income from property. The occupants have executed separate lease-deeds agreeing to pay rent for the area occupied by them. Thus, it is clearly the rent received from the tenants and is assessable as income from property. The other services rendered are only the normal facilities like water, power, etc. No evidence has been produced to show that the consultancy services have been rendered. Thus, he supported the orders of the lower authorities.
(3.) THE objects of the company have been stated in Clause IIIA of the memorandum of association which reads as under: III. THE objects for which the company is established are : A. THE main objects to be pursued by the Company on its inCorporation are the following : 1. To function as an investment and finance companyand to invest and/or finance and/or promote and/or establish in its own name or as a holding-company, or by entering into partnership with others all types of manu- facturing or service industries including Tourist Industry, Shipping, Commercial/Aviation, Hoteliering, Fishing, all types of Engineering Contracting, House Building, Plastics, Fertilisers, Electronics, Chemicals and Agro-based industries and to render consultancy services in the areas of Science and Technology, Management, Finance, Taxation, Efficiency Audit and Personnel and also to finance other financing institutions. 2. To do all acts and perform all functions falling within the description of 'Merchant Banking' as is known in business and industrial circles, other than 'Banking' as defined in the Banking Regulation Act, 1949. 3. To finance and/or invest in any business engaged in the distribution of goods and services including export of such goods and services, either independently as representatives of manufacturers of goods or services; or those manufacturers of goods or services themselves distributing their own goods or services. 4. To do the business of hire-purchase finance of all durable industrial and commercial goods and vehicles of all descriptions; machinery, equipment, tools and instruments of all descriptions; refrigerators, air-conditioners, washing machines and other equipment of personal use or otherwise or television and all types of electronic devices and equipment and all types of commercial, residential and industrial buildings.;

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