TMI Blog1997 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision of a Full Bench of the Patna High Court (see [1988] 169 ITR 617) in respect of the assessment years 1967-68, 1968-69 and 1969-70. The question raised in this case came up for consideration earlier before a Division Bench of the Patna High Court in the case of CIT v. S. K. Sahana and Sons Ltd. [1976] 102 ITR 437 which was called upon to consider the following question of law: "Whether, on the facts and in the circumstances of the case, income of the assessee received from the managing contractor was income from business ?" The assessment years involved in that case were 1963-64 and 1964-65. In that case the Tribunal found that the assessee was a public limited company deriving income from mining business known as New Bansjora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee could still be held to be carrying on the business through its agent. The Tribunal, by its appellate order, found that the relationship created between the assessee and the managing contractor was clearly one of principal and agent. The power of attorney executed by the assessee in favour of the managing contractor strengthened the conclusion that the legal relationship between the parties was that as between a principal and an agent and the cumulative effect of all the various clauses of the agreement established that the managing contractor aforementioned was only working as an agent of the assessee and the transaction was not at all that of letting out. In other words, there was not even a lease executed in favour of the mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1969] 74 ITR 7, this court found that the intention of the assessee was to part with the entire machinery of the factory and the premises with the obvious purpose of earning of rental income. This court held that "it was not the intention of the assessee to treat the factory and machinery, etc., as a commercial concern during the subsistence of the lease." The High Court felt that in view of the findings made by the Tribunal, the question before the High Court had to be answered in favour of the assessee. The Revenue did not pursue the case any further. The very same question once again cropped up in the course of the assessment years 1967-68, 1968-69 and 1969-70. The Appellate Assistant Commissioner held in favour of the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, in the instant case, in coming to its decision the mere fact that the decision of the Allahabad High Court has been affirmed by this court will not make any difference to the position in law. He took us through the various clauses of the agreement between the parties and contended that the judgment of the Full Bench must be upheld. In particular, he relied on the decision of this court in the case of New Savan Sugar's case [1969] 74 ITR 7, and contended that the principles laid down in that case are applicable to the facts of this case. We are unable to uphold the contention made on behalf of the Revenue. It has to be borne in mind that New Savan Sugar's case [1969] 74 ITR 7 (SC), was decided on its own facts. In that case it was r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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