TMI Blog1985 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... . Nisar Mehdi Khan. In R.C. No. 163 of 1979, the following questions have been referred for the opinion of this court, at the instance of the Revenue : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the directions given by the Commissioner to make the assessment in the status of an 'Association of persons' are invalid ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the rent of the building should be assessed under the head 'Property' in the hands of the individual co-owners and the rent from furniture and projector, etc., under the head 'Other sources ' in the assessment of the association of persons ? " The dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the building income is property income and the income derived from the projector, etc., is income from " Other sources ". The assessment made by the Income-tax Officer on the father Rafiq Mehdi Khan for the years 1971-72 and 1972-73 had become final. However, the Commissioner of Income-tax, invoking his powers under section 263 of the Income-tax Act, set aside the assessment made against Arif Mehdi Khan and Khalid Mehdi Khan, and directed the Income-tax Officer to make a fresh assessment in the status of an association of persons consisting of the father and four sons. The Commissioner's direction was to treat the entire income derived on account of lease of the building and hire charges received for furniture, fittings, etc., in the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the building should be assessed under the head " Property " and the rent from projector, furniture, fittings, etc., should be assessed under the head " Other sources " was accepted. Out of that finding of the Appellate Tribunal, the second question in R.C. No. 163 of 1979 which we have set out above, has been referred to us. Now, taking these two referred cases together and considering the only question in R.C. No. 75 of 1979 and the second question in R.C. No. 163 of 1979, we are of the opinion that the Tribunal erred in holding that a portion of the income that is attributable to the building is to be ascribed to the sources of property income while the income derived from leasing out the cinema projector and other fittings is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery in this case can only be for the purpose of using that machinery as a cinema projector. If so, the machinery leased out cannot be used without the building. Thus, the letting of the building becomes inseparable from the letting of the machinery. Accordingly, the income from the machinery as well as the income from the lease of the building should be treated as " income from other sources " falling under section 56 of the Act. The contrary view taken by the Tribunal runs counter to the judgment of the Supreme Court reported in Sultan Brothers P. Ltd. v. CIT [1964] 51 ITR 353. We accordingly answer the only question in R.C. No. 75 of 1979 and the second question in R.C. No. 163 of 1979 against the assessee and in favour of the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Blue Mountain Engineering Corporation [1978] 112 ITR 839 (Mad), CIT v. R. Dhandayutham [1978] 113 ITR 602 (Mad), CIT v. Ratan (C.) Co. and S. N. Agarwalla [1981] 128 ITR 39 (Cal), Universal Commercial Co. v.CIT [1981] 130 ITR 775 (Mad), ClT v. Hyderabad Deccan Liquor Syndicate [1974] 95 ITR 130 (AP), Ravinder Narain v. ITO [1974] 96 ITR 612 (Delhi), CIT v. Pure Nichitpur Colliery Co. [1975] 101 ITR 79 (Pat) and Ramanlal Madanlal v. CIT [1979] 116 ITR 657 (Cal). A contrary view has been taken by the Allahabad High Court in M. K. Day v. CIT [1982] 138 ITR 801, the Punjab and Haryana High Court in Rodamal Lalchand v. CIT [1977] 109 ITR 7 and the Patna High Court in Mahendra Kumar Agarwalla v. ITO [1976] 103 ITR 688. This question which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordinary assessments. The arguments of late Nambiar advanced in Lalji Haridas v. ITO [1961] 43 ITR 387 (SC), lend support to this view. In view of that, the assessments made against the other assessees for the assessment year 1973-74 should also be taken to have become final. The result is that the assessments made against the father in his individual status for 1971-72 and 1972-73 have become final, the assessment made against Khalid Mehdi Khan for the assessment year 1973-74 in the status of an individual has become final and the assessment against the other assessees made in their individual status for the assessment year 1973-74 also has become final. In those circumstances, the directions which have been issued by the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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