R. JAYASIMHA BABU, J.

The question referred to us at the instance of the Revenue is

"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the income derived by the assessee from letting out of the building along with chairs, mike etc. on the occasions of marriage and other functions, should be assessed only under the head Income from business and not under the head Income from house property and Income from other sources "

The assessment years are 1980-81 and 1982-83

The assessee is a charitable institution. It has put up a building for being made available to them as also to outsiders for purposes of marriage and other functions. It also supplies chairs, mikes etc., in the building and collects service charges from the parties to whom those facilities are made available. The assessee claimed that such income was income derived from business. The ITO held that it was assessable as income from house property. The Tribunal upheld the claim of the assessee holding that it was income from the business carried on by the assessee.

Counsel for the Revenue contended that if a owner of a property has let out his property to another the net income derived therefrom alone can be taxed under the head Income from the house property, the rentals actually received being the basis for determining the annual value of a building, counsel relied on the decision of the Supreme Court in the case of Sultan Brothers vs. CIT and contended that if an owner receives the income by letting out his building and even if such letting out includes the hiring of fixtures and furniture that portion of the income relating to the hiring can only be taxed under the head Other sources and not as business incomeIn the case of Sultan Bros. (supra), the Supreme Court has inter alia observed thus.

We think each case has to be looked at from a businessmans point of view to find out whether the letting was the doing of a particular business or the exploitation of his property by an owner.

The income received on account of the building having been given to another either by way of hire or by licence need not always be treated as income from house property. A Division Bench of this Court in the case of CIT vs. Admirality Flats Motel after referring to Sultan Bros case observed that they were unable to derive any assistance from the proposition laid down in the case of Sultan Bros. to the effect that in all cases where a person carries on a business of letting out flats and hiring furniture, the income derived therefrom could be assessed only under the heads property and Other sources.

The Supreme Court in the case of CIT vs. National Storage (P) Ltd. has cited with approval the decision of House of Lords in the case of Governors of the Rotunda Hospital, Dublin vs. Coman 1920 (7) Tax(Cases) 517 (HL) : 1921 (1) AC 1 (HL) wherein the hospital derived a substantial income from letting out the rooms in the another wing of the hospital for public entertainments, concerts, etc., for varying periods and applied the income to the general maintenance of the hospital. The said rooms were let upon terms which included the provision of seating, heating and attendance, but an additional charge was made for the gas and electricity consumed. It was held by the House of Lords in that case that the profits derived from the letting of the rooms in the another wing of the hospital were assessable to income taxThe case of CIT vs. Associated Building Co. Ltd. was relied upon by the Tribunal to hold in favour of the assessee in this case. In the said case, the assessee-company let out an auditorium in the basement of the building owned by the assessee therein with air-conditioning services and the Division Bench of Bombay High Court held that it was in the nature of a business activity and the income derived from such letting out was business income. The Court further held that the object of the activity by putting up a building and providing various services therein was earn income and it could not be regarded as a mere better exploitation of the building.

In this case, the building was put up by the assessee with the aid of donations and it has been let out by the assessee to others for functions such as marriages, and other functions, etc., and while making available the premises for limited periods, chairs, mikes, etc., were also made available to others for which charge is levied. This activity of earning an income from making the building available to others for a charge for limited periods is not to be equated with the letting out of a building on lease from month to month or year to year, wherein it could be said that the building was being exploited by the owner to earn a rental income. Here the expression letting out is used only for a limited purpose. The building remains under the control of the owner. What is granted by the owner is only a licence for a prescribed fee for a specified period. This activity of the assessee can be described as a business carried on by the assessee with the intention of earning income from the building. The business being that of making available the building to others for a charge for a limited duration. The overall control of the building at all times being retained by the assesseeThe Tribunal is, therefore, right in holding that the income derived by the assessee from making the building owned by it available to others for a limited period for various purposes is only a business income. We, therefore, answer the question referred to us in favour of the assessee and against the Revenue.