R.M.LODHA, J. - (1.) THE Income Tax Appellate Tribunal, Jaipur Bench,Jaipur, has referred the following question for answer by the High Court: Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the income of the assessee should be assessed under the head 'Income from business' instead of 'Income from property' as assessed by the Income Tax Officer?
(2.) M /s. Hotel Ratanada International Pvt. Ltd., Jaipur (hereinafter referred to as 'the assessee') was incorporated on 22 -4 -1978. Inter alia, Clause (3) of the memorandum of association provides that one of the objects of the company is to carry on all or any of the business in respect of land and/or properties, dwelling houses, hotels, motels, shops, offices, industrial estates, agricultural land, etc. The aforesaid question relates to the assessment years 1981 -82 and 1982 -83. For the sake of convenience, we shall refer to the facts pertaining to the assessment year 1981 -82. The status of the assessee is a private limited company. In the return of income filed by the assessee for the assessment year 1981 -82, a loss of Rs. 967 was shown. In the profit and loss account for the assessment year under consideration, the assessee showed rental income of Rs. 32,238 from the eight flats let out to service class tenants and rental income of Rs. 3,600 for the office accommodation let out to M/s. Hira Fertilizers and Chemicals (P.) Ltd. Except the total rental income of Rs. 35,838, no other source of income is shown in the profit and loss account. Against this income, the assessee claimed various expenses in respect of repairs, electricity and water charges, etc. for the properties let out. The expenses for the maintenance of office, interest and depreciation was also claimed in the profit and loss account resulting; in a loss of Rs. 967.
(3.) IT was not disputed before the assessing officer that in the immediately preceding assessment year, i.e., for the assessment year 1980 -81, on similar facts, the rental income from the flats and office was held to be the income under the head 'Income from property'.;