9911796707
TMI Blog1984 (1) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... itation. The Tribunal, however, held that the appeal was in time and that finding of the Tribunal was upheld by the Hon'ble High Court at Calcutta. The Hon'ble High Court, however, directed that the ITO be permitted to amend the date of verification of the memorandum of appeal filed before the Tribunal. It is important, to mention in this connection that the Tribunal while disposing the appeal by its order dated 26-3-1973 did not deal with the merit of the case. 3. In pursuance of the direction of the Hon'ble High Court, the Tribunal again heard the appeal and disposed of the same by its order dated 8-2-1979 directing the ITO to amend the date of verification of the memorandum of appeal filed before it and observed that the said appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revised return should be taken at Rs. 74,868. The ITO was of the opinion that since letting out of premises was one of the business activities of the assessee-firm, the amounts received by it as salami were assessable as business income in the light of the decision in the case of Karanpura Development Co. Ltd. v. CIT [1962] 44 ITR 362 (SC). Accordingly, the ITO included the sum of Rs. 74,868 in the assessee's total income stating 'Salami receipts being treated as trading profits'. 5. The assessee preferred an appeal before the AAC and contended that in view of the decisions in Member for the Board of Agrl. Income-tax v. Sindhurani Chaudhurani [1957] 32 ITR 169 (SC), CIT v. Rao Thakur Narayan Singh [1962] 46 ITR 901 (All.) and CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Karanpura Development Co. Ltd. at page 377 to the effect that a company formed with the specific object of acquiring properties not with the view to leasing them as property but to selling them or turning them to account even by way of leasing them out as an integral part of its business, cannot be said to treat them as landowner but as trader. He urged that in the instant case the assessee, admittedly, was not the landowner and, therefore, the amount so received as salami was to be treated as trading receipts. He also relied on the decision of the Supreme Court in the case of Ukhara Estate Zamindaries (P.) Ltd. v. CIT [1979] 120 ITR 549 wherein the same view has been reiterated by the Supreme Court. The learned departmental representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the objects, inter alia, of acquiring and disposing of underground coal-mining rights in certain coalfields. The company never worked the coalfields with a view to raising coal nor did it acquire or sell coal raised by the sublessees. But in the present case the assessee took on lease certain space of the building in order to construct a building thereon and to let it out to the prospective tenants to derive income therefrom. Such income of the assessee, therefore, cannot be strictly brought within the term 'business income' and the amount so received as salami from tenants cannot be assessed as trading profit. The learned counsel for the assessee, however, did not make any submission as to the applicability of section 10(3). 8. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erties belonging to the family comprising coal bearing lands and mines, and also took an assignment of movable of the family, including Government promissory notes, jewellery belonging to the members of the family and arrears of rent, etc. During the relevant previous years, the assessee granted several sub-leases for periods of 999 years to various companies and received salami and premia therefor and also received compensation for portions of the estate which were compulsorily acquired. Since inception, the assessee had not taken any other property on lease. On a reference, the Supreme Court, reversing the decision of the High Court, on the facts, held that the assessee had dealt with its leasehold interest in the zamindari property as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of which the assessee was to be the owner ; but in the case of Karanpura Development Co. Ltd. the assessee was a company formed with the object of acquiring and disposing of underground coal mines right in certain coalfields. The memorandum of association of the company enumerated other objects, such as coal raising but the assessee restricted its activities to acquiring coal mining leases over large areas, developing them as coalfields and then sub-leasing them to collieries and other companies. The leases were acquired for a term of 999 years and were sublet for the balance of the term of the respective leases minus two days. The company never worked in the coalfields with a view to raising coal nor did it acquire or sell coal raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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