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Issues Involved:
1. Whether the assessment of the assessee under section 9 of the Indian Income-tax Act was proper. 2. Whether the assessee company can be said to be the owner of premises No. 12, Lower Chitpur Road (known as Teiretta Bazar). 3. Whether the lease of the premises should have been assessed under section 9 or section 12 of the Indian Income-tax Act. Issue-wise Detailed Analysis: 1. Assessment under Section 9 of the Indian Income-tax Act: The primary issue was whether the income from the property leased to the assessee should be assessed under section 9 or section 12 of the Indian Income-tax Act. The court noted that the question framed by the Tribunal did not accurately reflect the controversy. The court reframed the question to focus on whether the assessment of the assessee under section 9 was correct based on the lease deed dated February 14, 1948. The court concluded that the assessment under section 9 was proper, as the lease deed indicated that the assessee was the owner of the structures on the property, even though the land remained with the lessor. 2. Ownership of Premises No. 12, Lower Chitpur Road: The court examined the clauses of the lease deed to determine the ownership status of the premises. The lease was for 66 years with an option of renewal for 33 years. The lease required the lessee to pay Rs. 4,00,000 as the price for the materials of the old structures and a progressive monthly rent. The court found that the lease deed intended to sell the existing structures to the lessee, making the lessee the owner of the buildings during the lease term. This conclusion was supported by clauses stating that the lessee would receive compensation for the structures in case of compulsory acquisition and would pay betterment fees for the demised properties. 3. Assessment under Section 9 or Section 12: The assessee argued that the lease should be assessed under section 12, which pertains to income from other sources, rather than section 9, which pertains to income from property. The court rejected this argument, emphasizing that the lease deed indicated that the lessee was the owner of the structures, making section 9 applicable. The court referred to previous cases, such as Ballygunge Bank Ltd. v. Commissioner of Income-tax and Commissioner of Income-tax v. Madras Cricket Club, to support the principle that ownership of buildings, even if the land is owned by another, warrants assessment under section 9. Conclusion: The court held that the assessment of the assessee under section 9 of the Indian Income-tax Act was correct. The lessee was deemed the owner of the existing structures on the property, and the lease deed's terms supported this conclusion. The court dismissed the assessee's arguments and upheld the Tribunal's decision, affirming that the income from the property should be assessed under section 9. The assessee was ordered to pay the costs of the reference, and the judgment was certified for two counsel.
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