COMMISSIONER OF INCOME-TAX VS ALLAHABAD MILLING CO. (PVT.) LTD., 1998 PTD-ALLAHABAD-HIGH-COURT-INDIA 1072 (1995)

Income-tax---

----Business---Business income or income from other sources---Income from leasing out of cold storage and ice plant---Assessable as business income.

Held, that on a true interpretation of the lease agreement and the memorandum of association of the assessee-company, the Tribunal was legally correct in holding that the income from leasing out of the cold storage and ice plant was assessable as "profits and gains" of business and not under the head "other sources" though such income had been assessed under the head "other sources" till the assessment year 1959-60.

C.I.T. v. Allahabad Milling Co. (Pvt.) Ltd. (1992) 195 ITR 325 (All.) applied.

JUDGMENT

The Income-tax Tribunal, Allahabad, has referred the following questions of law under section 256(1) of the Income-tax Act, 1961, for opinion of this Court:

"(1) Whether, on the facts and in the circumstances of the case and on a true interpretation of the lease agreement and the memorandum of association of the assessee-company, the Tribunal was legally correct in holding that the income earned by the assessee from leasing out .of the cold storage and ice plant to Rajendra prasad Kishan Lal should be assessed as 'profits and gains' of business and not under the head 'other sources'?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the income from leasing out of the cold storage and ice plant should be assessed as profits and gains of business in spite of the fact that such income was assessed under the head 'other sources' till the assessment year 1959-60?"

An identical question between the parties has been decided in Income-tax Reference No.42 of 1979 connected with Income-tax Reference No.236 of 1979---CIT v. Allahabad Milling Co. (Pvt.) Ltd. (1992) 195 ITR 325 (All), decided by the Hon'ble Chief Justice and Hon'ble Mr. Justice Sakha Ram Singh on April 2. 1991.

In view of the above, we answer the questions in the affirmative, in favour of the assessee and against the Revenue. No order as to costs.

M.B.A./1266/FC Order accordingly.