Rent from Leave & License of office premises taxable as “business profits”

The Scientific Instrument Co Ltd vs. CIT (Allahabad High Court)

The assessee, carrying on business of import and sale of scientific instruments, purchased premises at Nariman Point, Mumbai in 1982 and had its regional office there. In November 1987, the assessee gave the property on leave and licence basis to Citibank pursuant to which it received rental income which it offered to tax as “business profits“. The AO assessed the said rental as “Income from house property”. The CIT (A) reversed the AO and held the rental assessable as “business profits”. The Tribunal reversed the CIT (A). On appeal by the assessee to the High Court, HELD reversing the Tribunal: