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TMI Blog2003 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... e rent payable under the said lease were to go to the financial corporations to liquidate their respective dues from the petitioner. On an expiry of the said period another lease was executed on April 19, 1974, followed by a third lease deed dated April 30, 1979. Subsequent lease deeds again were executed for further periods which do not govern the subject periods. In respect of each assessment year, the lease rent received by the petitioner was shown by it under the head "Profits and gains of business". The incometax authorities accepted the said income under the said head from the assessment year 1969-70 till 1977-78. But for the assessment year 1978-79, the said contention of the assessee has been rejected and the said lease rent income has been treated by the income-tax authorities as income from other sources. Similar finding was recorded for the assessment years 1979-80 and 1981-82. In respect of the assessment year 1980-81, the Tribunal accepted the contention of the assessee and decided in its favour. The prayer for transmitting statement of facts with reference to this court, was rejected by the Tribunal. The application before the High Court for direction upon the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the periods covered by similar lease deeds in respect of the earlier periods from 1969-70 till 1977-78 and for subsequent periods including 1988-89, the income-tax authorities accepted the lease rent income of the assessee as business income, then treating the similar income for intermediate three periods as income from other sources without there being any special reason nor any difference in circumstances, will lead only to inconsistency. The further contention of the appellant-assessee is that the approach of the authorities concerned in the present matter is contrary to the settled principles of law and the intention of the assessee while executing the lease deeds covering the concerned periods, cannot be assessed taking the total periods of lease. Various clauses containing the terms of agreement have also been relied on by learned counsel for the assessee for showing that on each occasion the lease agreement was only for five years and there was no clause for renewal of lease indicating that at no point of time the assessee had any intention of creating a long lease and the directors' report for all relevant periods shows consistently that the matter was being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertained from the attending circumstances for ascertaining the intention of the assessee as to whether the assets have been given on lease on temporary basis to meet some situation not within the control of the assessee or for finally parting with the property. The said aspect was considered by the apex court in the case of New Savan Sugar and Gur Refining Co. Ltd. v. CIT [1969] 74 ITR 7 wherein various cases relating to the above question were considered by the apex court and it was held that: "no general principle can be laid down which would be applicable to all cases and each case must be decided in the setting and background of its own facts." In the said case the facts were considered including the terms of the lease deed and on scrutiny of those it was held that the intention of the assessee was to part with the entire machinery of the faCtory and the premises with the obvious purpose of earning rental income. It appears from the judgment that the terms and conditions of the lease which weighed with the learned judges provided that the lease was for a term of five years with an option to continue for a further term of five years and thereafter two further options of five ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and advise in respect of maintenance of the building and machinery. The lessee was to contribute during the period of lease all contributions and charges to Sri Hanuman Sugar Employees Provident Fund and Employees State Insurance contribution payable for the workmen of the factory and to maintain such staff for the said factory as may be required. The lessee was also under obligation to continue to utilise the same selling agent on the same terms as that of the assessee. Under the agreement upon the expiry of the lease, the lessor is to take over the staff and workmen then in employment in the said factory and also to take over all useable stocks of stores, spare parts and the raw materials. The lessor has kept the option to determine the lease by giving the lessee three months prior notice in writing. The aforesaid facts all taken together go to indicate that the assessee had no intention of parting with the factory finally and it was a temporary arrangement with the lessee without keeping any option for the lessee to renew the lease. We find from the facts that the lease was renewed by the subsequent lease deeds after the expiry of the prior lease and that too was done upon r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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