KHATTAR KILN CO Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE assessee-firm, was-engaged in the business of brick-kiln during the assessment year 1971-72 and its total income was assessed by the ITO at Rs. 59,240. The firm owned four kilns and collected four amounts of Rs. 2,363, Rs. 435, Rs. 2,772 and Rs. 5,234 as royalty from various customers. In the absence of a mining lease agreement between the State Govt. and the brick-kiln owners the royalty was held to be not payable, by a Full Bench of this court in Amar Singh Modi Lal v. State of Haryana, AIR 1972 P and H 356. As a result of this decision, the asses see-firm also did not pay the royalty to the Government and the ITO added this amount to its total income. The appeals filed by the assessee before the A AC and the Tribunal were also dismissed. Thereupon an application under Section 256 (1) of the I. T. Act, 1961, was moved for referring the following two questions to this court: "1. Whether, on the facts and circumstances of the case, the royalty collected by the applicant is taxable as part of the total income ?

(2.) WHETHER, on the facts and circumstances of the case, the royalty collected by the applicant and held not payable to the Haryana Government in view of the Punjab and Haryana High Court decision dated March 25, 1971, in the case of Amar Singh Modi Lal v. Stale of Haryana, AIR 1972 P and H 356 [fb] as taxable for any assessment year earlier than 1972-73 assessment year ?" 2. The Tribunal rejected the application with the following observations :

(3.) THEREAFTER, the assessee filed the present application under Section 256 (2) of the Act for a mandamus directing the Tribunal to refer the following question to this court: