VARGHESE P A Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) This is a reference under S.256 (1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) by the Income Tax Appellate Tribunal, Madras Bench on the application of the assessee. The question referred for decision

(2.) The reference relates to the assessment year 1963-64. The assessee is a medical practitioner. In 1962, he constructed a building at Ernakulam. When the construction was in progress, he entered into an agreement with the Export Promotion Council to lease the second floor and part of the first floor of the building to the Council. The terms and conditions of the lease are contained in a letter dated 16-7-1962 written by the Chairman of the Council to the assessee. This letter is Annexure A to the reference; and it reads:-

(3.) Counsel for the assessee submitted that the conclusion of the Tribunal cannot be sustained on the authority of the above decision of the Supreme Court, and that the lease evidenced by Annexure A fell within Clause (iii) of Sub-section (2) of S.56 of the Act. It is necessary to refer to some of the provisions of the Act to examine this contention. S.4 contains the charging provision; and the charge is on the total income of the previous year. "Total income" is defined as the total amount of the income referred to in S.5, computed in the manner laid down in the Act. S.14 classifies all income under several heads for the purpose of computation of the total income. That section reads:-