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TMI Blog1985 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment years are 1968-69 and 1969-70. The assessee was the owner of Ganeshdih Colliery. It was leased out to Prabhulal Agrawal and Magilal Sharma. The assessee returned an income of Rs. 34,533 as income from business. In view of the lease in favour of the managing contractor, the claim of income from business was rejected by the ITO and it was held to be income from " Other sources ". His vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. This being the position, we hold that the income of the assessee is assessable under the head 'Business' and not from `Other sources'. " The appeal of the assessee was thus allowed by the Tribunal. At the instance of the Commissioner of Income-tax, a consolidated reference has been made to this court. The question of law referred to us reads as under: " Whether, on the facts and in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd ground was that the Punjab High Court in Nauharchand Chananram v. CIT [1971] 82 ITR 189, had expressed the view that income from the lease of the kind with which we are concerned must be treated as income from " Business ". The Tribunal thus gave its judgment following the decision of the Punjab and Haryana High Court. The short answer is that the decision of the Punjab and Haryana High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 440 and CIT v. Sahana and Sons [1976] 102 ITR 437 (Pat), as also in Tax Cases Nos. 85 to 90 of 1976-CIT v., Kuya and Khas Kuya Colliery Co. [1985] 156 ITR 206, which have been disposed of today. I have not the least doubt that by executing a lease in favour of the managing contractor, the lessor/contractor/managing agent completely disassociates himself from the business. Nothing was brought on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease could not, therefore, be treated as income from business. It has to be treated as income from other sources. The Tribunal grievously erred in the view it took in the matter. For the reasons stated above, I am definitely of the view that the Tribunal was not correct in holding that the income derived by the assessee was taxable under the head ." Business " and not under the head" Other sour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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