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TMI Blog1984 (8) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the assessee did any business during the period relevant to the assessment year 1969-70 ? 3. Whether, on the facts and in the circumstances of the case, the assessee was entitled to registration under section 185 of the Income-tax Act, 1961 ? " For the assessment year 1969-70, the assessee filed a return declaring the income derived by it from the lease of a cinema theatre known as " Venkateswara Talkies ". The assessee claimed that it is a partnership firm evidenced by a deed of partnership entitled to registration under s. 185 of the I.T. Act, 1961. The ITO rejected the claim for registration on the ground that the income derived by the assessee-firm from the lease of the cinema theatre was income u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the idea of carrying on business. On these facts, the Tribunal came to the conclusion that the asset, namely, the cinema theatre, continued to be a commercial asset producing income assessable under the head " Business In that view of the matter, the Tribunal accepted the assessee's contention that the income derived by the lease of the cinema theatre is assessable under the head " Business " under s. 28 of the I.T. Act. Once the question regarding the assessability of the income under the head " Business " is resolved in favour of the assessee, objection regarding the grant of registration did not survive, because the ITO refused to grant registration to the firm on the ground that it has not been carrying on any business. In the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the affirmative, that is, in favour of the assessee and against the Department. Question No. 2 has also to be answered in favour of the assessee in view of the findings of fact by the Tribunal. The Tribunal found that the assessee has been carrying on business till April, 1969, and leased out the theatre for a short period up to August, 1971. There is no material on the basis of which it could be said that the assessee intended to stop carrying on the business and converted the commercial asset into a capital asset. On the facts, the Tribunal came to the conclusion, and rightly so in our opinion, that the assessee must be held to be carrying on business even after the lease of the theatre for a temporary period from April, 1969. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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