TMI Blog1959 (7) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,950, for the lease of the building and at the rate of ₹ 5,000, for the hire of furniture and fixtures. Initially, the Income-tax Officer assessed the income received under the lease under section 12 of the Income-tax Act. For the assessment year 1952-53, the assessment proceedings were brought before the Tribunal and the Tribunal observed in the course of its judgment, though that question did not arise in the case, that the question whether the income from that property should be computed under section 9 or under section 12 deserves further scrutiny. The Income-tax Officer then computed for the assessment year 1953-54 income out of the building under section 9 of the Income-tax Act and the income derived from hiring of the furnit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the building and the furniture and fixtures cannot be computed under section 10 of the Act. Section 9 of the Income-tax Act makes provision for computation of the income under the head Property . Section 10 makes provision for computation of income received from business and section 12 for computation of income received from other sources. By clause (3.) of section 12 which was added by Act 7 of 1939 it was enacted that where an assessee lets on hire machinery, plant or furniture belonging to him, he shall be entitled to allowances in accordance with the provisions of clauses (iv), (v ), (vi.) and (vii.) of sub-section (2.) of section 10. Evidently by enacting this clause, the Legislature intended to give the benefit of the four cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and these conditions are that there is a letting on hire machinery, plant or furniture belonging to the assessee, that along with that letting the buildings are let out and that the letting of the buildings is inseparable from the letting of the said machinery, plant or furniture. In our judgment, it was intended by the Legislature that the primary letting must be of the machinery, plant or furniture and that together with such letting or along with such letting there is a letting of buildings, the two lettings being inseparable from each other. It is only if these conditions are fulfilled that the taxable income of the buildings will be computed under sub-section (4.) of section 12. We are unable to accept the argument of Mr. Palkhivala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the entire unit was intended to be let for the purpose of a hotel and was in fact let out for the purpose of running a hotel, boarding and lodging house or a restaurant, and that it must be held that the intention was to let out the unit in which the primary letting was of the furniture or fittings or fixtures. We are unable on the plain words used in the document to accept that contention. What has been let out is the building constructed by the assessees, and for making the building fit for running a hotel or a boarding and lodging house or a restaurant, furniture and fixtures have been installed. It cannot be said in the case of such a lease that the lease was primarily of furniture and not of the building. Mr. Palkhivala invites ..... X X X X Extracts X X X X X X X X Extracts X X X X
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