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TMI Blog1954 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... oy the usufruct of the Hat and to sell and make gift of the land upon which the Hat was located. The question in this case refers to the income received by the Rani from Jharia Hat for the accounting years 1354 and 1355 Bengali Samvat. For these two account- ing years the net amounts of income received by the Rani were ₹ 7,728 and ₹ 15,889. The Income-tax Officer took the view that these amounts were taxable in the hands of the assessee under the provisions of section 16(3)(a)(iii) of the Income-tax Act. The Income-tax Officer was of the opinion that the Raj had made a transfer of assets in favour of his wife and there was no adequate consideration within the meaning of section 16(3)(a)(iii). An appeal was taken on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin the meaning of section 16(3)(a)(iii) of the Act. The contention of the learned counsel was that the assessee had made a transfer to Rani Usha Debi of the right of collecting rent from the Jharia Hat on a permanent basis. It was contended by the learned counsel that the Rani was not granted any right in the property apart from the right of collecting rent and the mokarri lease executed by the assessee was not tantamount to a transfer of assets within the meaning of section 16(3)(a)(iii). In my opinion the argument advanced by Mr. Dutt cannot be accepted as correct. The question turns upon the legal effect of the mokarri lease executed by the assessee on the 21st of August, 1947, in favour of Rani Usha Debi. The operative part of this d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leasehold interest of a permanent character in favour of the Rani. Clause (1) of the document is significant for the Rani is granted the right to possess and enjoy the usufruct of the demised premises and also to realise the income and profits of the demised property from generation to generation and she is further given the right to sell and make a gift of the lands upon which the Hat was located. In the course of his argument Mr. Dutt referred to section 105 of the Transfer of Property Act which states: "A lease of immovable property is a transfer of a right to enjoy such property made for a certain time, express, or implied, or in perpetuity, in consideration of a price paid..." It was argued by the learned counsel that the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mischief of section 12B. The argument was rejected by the Division Bench and it was held that the lease of mineral asset was a transfer of a capital asset within the meaning of section 12B and the gains arising to the assessee on account of this transfer of the capital asset was taxable by the Income-tax authorities. The principle laid down in that case supports the view, which I have expressed, that the mokarri lease executed by the assessee Raja Kali Prasad Singh is tantamount to a transfer of asset in favour of Rani Usha Debi within the meaning of section 16(3)(a)(iii) of the Act. I should add that Mr. Dutt conceded in the course of his argument that the transaction of the mokarri lease was not supported by adequate consideration with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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