L. Narasimha Reddy, J.

This reference is at the instance of the Revenue. The respondent is an assessee and she undertakes the activity of construction of buildings, giving them on lease and other allied activities.

Certain extent of land owned by the Young Men’s Christian Association at Secunderabad was taken on lease by the respondent. In terms of the agreement between the parties, construction was made and buildings were given on lease. The expenditure incurred for construction as well as the income derived from the buildings constituted the subject matter of assessment for various years under the Income Tax Act (for short ‘the Act’). While for some years, the income derived from the buildings so constructed was treated as the one from business, for others the Assessing Authority treated it as the one from house property. Similarly, the claim of the respondent that the expenditure incurred for construction of the building must be treated as the revenue expenditure, was not accepted and it was treated as capital expenditure.

The orders passed by the Assessing Authority were appealed against, and ultimately, the matter landed before the Income Tax Appellate Tribunal, Hyd