TaxTMI 
TaxTMI 
1970 (5) TMI 1
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....hey are: "(1) Whether, on the facts and in the circumstances of the case, the sums of Rs. 2,55,733 and Rs. 3,00,332 receivable by the assessee as arrears of royalty and rent were assessable as the income of the assessee for the assessment years 1948-49 an 1950-51 respectively ? and (2) Whether, on the facts and circumstances of the case, the sum of Rs. 2,80,000 being the surplus derived by the assessee on sale of property was assessable as the income of the assessee for the assessment year 1950-51 ?" The facts set out in the statement of the case, in brief, are as follows: The assessee, M/s. Rajasthan Mines Ltd., is a public limited company incorporated on January 23, 1947. The Raja of Ramgarh was the landlord of the North and South....
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....o the date of conveyance, namely, December 22, 1947, as the assessee's income for the previous year ended on the 31st March, 1948. The net amount included in the assessment under that head was Rs. 2,55,733. In the previous year ended on December 31, 1949, relevant for the assessment year 1950-51, the assessee purchased another lot of villages from the Raja of Ramgarh as per the conveyance dated January 24, 1949, in pursuance of the agreements already referred to for a consideration of Rs. 2 lakhs with all arrears of rent and royalty which on December 31, 1948, amounted to Rs. 3,00,332. On August 13, 1949, the assessee sold away its right, title and interest in the major portion of the villages acquired under the aforesaid deeds of conveya....
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.... collect arrears of rent and royalty cannot be considered as an income. It is true that the assessee purchased the lessor's right from the Raja of Ramgarh in pursuance of the agreements entered into by the Raja of Ramgarh with third parties whose rights had been acquired by the assessee. The assessee-company had been incorporated, as seen earlier, on January 23, 1947. Therefore it could not have got any right in the property prior to the conveyance in its favour on December 22, 1947. As per the terms of the said conveyance, the assessee became entitled to the arrears of rent and royalty as a purchaser of those rights. It had no right to collect those arrears of rent and royalty as the owner of the property. It may be that in determining the....
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....ll and dispose of and deal with mining properties is an inconclusive one. It is not shown that the assessee had acquired or sold any other property. The fact that the assessee sold property purchased by it for profit is not decisive in finding out whether the sale was effected in the course of the business of the assessee. From the fact that the assessee could not undertake large-scale and profitable mining in the area which was in its possession, no inference may be drawn that lands were acquired with a view to sell later on, nor the circumstance that the properties were sold very soon after they were purchased affords any basis for the conclusion that the sale in question was effected in the course of the business. The primary facts found....