COMMISSIONER OF INCOME TAX Vs. GANESHDASS SREERAM

JUDGEMENT

(1.) TWO questions are referred to this Court under S. 256(1) of the INCOME TAX ACT, 1961. The questions read as under :

(2.) GANESHDASS Sreeram is a registered firm. The firm, in the assessment for the asst. yrs. 1966 - 67, 1967 -68, 1968 -69, 1969 -70, 1970 -71 and 1971 -72, claimed rents obtained by the firm as business income. The ITO held that the income is not business income but is income from other sources for the six years. On appeal, the AAC confirmed the order. On further appeal, the Tribunal reversed the finding and allowed the appeal. Thereupon, at the instance of the Revenue, the above two questions are referred to this Court.

(3.) THE assessee intended to start the Anjali Cinema at Shillong but the firm could not obtain the licence for running the theatre and, therefore, the theatre was let out to one H. O. Unger who had a licence for running a cinema theatre. In the rental agreement, it was stipulated that the firm is to attend to major repairs of furniture, fixtures and machineries. The decoration of the hall or replacing of chairs was to be attended by H. O. Unger with the permission of the firm. The tenancy was to be terminated by giving one calendar month's notice. The assessee let out Anjali Cinema thereby to H. O. Unger as he possessed a licence for running a cinema. The moment the firm got the licence, it was agreed that the firm is to terminate the lease and run this business.