storage charges received
This query is : Resolved
29 October 2009
A Firm was using a large godown owned by it, to store stock of its business. after some time, a part of the godown was rented out and the other part was continued to be used for the business.
business of the firm is bale pressing. the godown rented out is used by the tenant to store cotton bags.
the tenant as wel as others would send their cotton bags to the firm for pressing. if after pressing, the customers donot take back their bales, they are stored inthe godown retained by the firm for its use. such storage is charged in thhe hands of customers.
is this storage charge to be treated as rental income?
or is it a business income?
thanks in advance.
kula
business of the firm is bale pressing. the godown rented out is used by the tenant to store cotton bags.
the tenant as wel as others would send their cotton bags to the firm for pressing. if after pressing, the customers donot take back their bales, they are stored inthe godown retained by the firm for its use. such storage is charged in thhe hands of customers.
is this storage charge to be treated as rental income?
or is it a business income?
thanks in advance.
kula
30 October 2009
According to my opinion it is business income beacuse you are providing the services of storage in the normal course of your business i.e. base pressing.
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