COMMISSIONER OF INCOME TAX Vs. U.K. TEXTILE

JUDGEMENT

(1.) THE following question has been referred by the Tribunal, Ahmedabad Bench 'B', under Section. 256(1) of the IT Act, 1961 (the Act), at the instance of the CIT :.

(2.) THE assessment year is 1988 -89. The assessee -firm was constituted for the purpose of carrying on business of job work of printing of cotton sarees. The assessee was assessed under Section. 143(1) of the Act. The Commissioner of Income -tax, Rajkot (CIT), took action under Section. 263 of the Act on the ground that though the firm was constituted for the purpose of carrying on business it had not carried on any business activity but let out building along with machineries and was earning lease rent. That enjoyment of lease rent does not amount to any business activity. He, therefore, proposed to treat the action of the AO in granting registration to the assessee -firm to be erroneous and prejudicial to the interests of the Revenue. After hearing the assessee's representative, he passed the following order :

(3.) HEARD Mr. Tanvish U. Bhatt, learned standing counsel for the applicant -Revenue. Though served, there is no appearance on behalf of the respondent -assessee.