The Scientific Instrument Co. Ltd. Vs CIT (Allahabad High Court)- All the assets of the business were not rented out by the appellant company. It was doing the main business of manufactures, imports, purchases and dealing in scientific apparatus, chemicals, chemical products, articles of glass, metal, wood, paper etc., more or less connected with science, as given clause 3 (a) of the memorandum of association.
Out of the three properties at Mumbai, the property in dispute was being used for its Regional Office. In the interest of the company, it decided to let out one of its properties, to the City Bank, by way of exploitation of business assets, for making profit. The assets were let out, while carrying out other business activities. There was nothing on record, to show that the appellant had sold away the properties or abandoned its business activities. In the circumstances, in order to exploit business assets, as a prudent business decision, the appellant took interest free loan from the City Bank, rented out, one of its properties to it, and shifted its Regional Office. In this commercial venture, the appellant received a higher income regularly from its commercial assets.
Court No. – 32
Allahabad High Court
