DHARAK LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are references under section 256(1) and (2) of the Income-tax Act, 1961, whereby the following common question has been referred :

(2.) THE facts of the case are as follows :

(3.) THE Income-tax Officer, while considering the nature of the income under those leases, held that there was no nexus between the income earned and the production of the distillery. THE assessee had nothing to do with the day-to-day business, as the hirer had to keep the machinery in food condition and working order. He held that the income from the leasing out of the distillery plant was income from "other sources". As regards the printing machinery let out to M/s. Alembic Chemical Works Co. Ltd., the Income-tax Officer found that there was only one machinery and it was doubtful whether the assessee could have carried on the business on one machine only. He, therefore, held that the income derived form letting out the printing machinery is also from "other sources."