ROHTAS INDUSTRIES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this case the assessee is Rohtas INdustries Ltd., which is a public limited company carrying on the business of manufacture and sale of cement, sugar, paper and pulp and certain chemical products. The assessee owns certain buildings and quarters around its factories, most of which are let out to its employees and some to outsiders. The rents are fixed according to the types of buildings and quarters let out. The type of premise allotted to any of the Company's employees depended upon his status as an employee. The Company collected rents from its employees, and in its turn the Company granted rent allowance to its employees. The rent charged from them was see off against house rent allowance. IN case the employee was allotted quarters carrying lower rent than the house allowance granted to him, the difference-between the two amounts was paid to the employee in cash. It is also admitted that there is no compulsion upon the employees to stay in the buildings owned by the Company.

(2.) FOR the assessment year 1948-49 the Company realised a rental income of Rs. 52,479/- which included a sura of Rs. 7,979/- representing rent) from buildings constructed during the accounting year. The total amount of rent also included rent realised from outsiders occupying the buildings owned by the Company. The Income-tax Officer assessed the income under Section 9 of the Income-tax Act after making the statutory allowance for repairs. It was argued on behalf of the assesses that the income should be taxed under Section 10 of the Income-tax Act. The argument was rejected by the Income-tax Officer and the claim of the assessee for repairs and depreciation was disallowed. The assessee took the matter in appeal before the Appellate Assistant Commissioner.