TMI Blog1985 (10) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... is 1969-70. The assessee had constructed a building called " Meher Chambers " consisting of a ground and five upper floors. It was centrally air-conditioned. By three leases, separate premises in the building were leased to three tenants. By another set of three agreements, the air-conditioning facility was made available to the three tenants. We shall refer to the agreements in some detail. The assessee filed a return for the assessment year 1962-63 declaring the income received from the leases under the head " Income from property " and the income from the agreements under the head " Income from other sources ". Subsequently, it filed a revised return declaring the income front the leases and the agreements under the head " Income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenants to use the installation, such use to be made by the tenants for six days during each week and for ten hours during each day. Amounts payable by the tenants for such use of the installation were fixed under the agreements. It may be noted that the assessee had stated before the Tribunal that this payment was based on the rate of 75 paise per square foot. The agreements provided that, in the event the tenants renewed the leases of the premises, they would be bound to extend the terms of their agreements for the like period, the intention being that both terms should run concurrently. Clause 5 of the agreements made it clear that the assessee was to be in control of the installation and was to be responsible for its maintenance and ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letting, if it is not chargeable to income-tax under the head 'Profits and gains of business or profession'. " It was contended on behalf of the Revenue by Mr. Dhanuka that section 56(2)(iii) of the Income-tax Act, 1961, contemplated both the letting of a building and the letting of a plant. In the instant case, there was no letting of the installation. Section 56(2)(iii), therefore, did not apply. In the alternative, Mr. Dhanuka submitted that, having regard to the tests laid down by the Supreme Court in Sultan Brothers Private Ltd. v. CIT [1964] 51 ITR 353, to which we shall refer and assuming that there were two such lettings, they were separable and the provision did not apply. Mrs. Jagtiani, learned counsel for the assessee, submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act. The income from the agreements could well have been taxed under the head " Income from other sources " because it fell within the purview of section 56(1) of the said Act. Mrs. Jagtiani submitted that depreciation had been allowed on the installation and that could have been allowed only under section 57(ii) of the said Act, but she was unable to show upon the record that such depreciation had, in fact, been allowed. In the circumstances, we cannot preclude the Revenue from arguing that there was no letting of the installation. The assessee had entered into the three agreements with the tenants in respect of the same installation. The tenants were, under the agreements, permitted to use the same installation. Such use was to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the furniture and the building, that the two should be enjoyed together ? Was it the intention to make the letting of the two practically one letting ? Would one have been let alone, and a lease of it accepted, without the other? If the answers to the first two questions were in the affirmative and the last in the negative, then it had to be held that it was intended that the lettings would be inseparable. The decision of this court in CIT v. D. L. Kanhere [1973] 92 ITR 535, in which the decision in Sultan Brothers' case [1964] 51 ITR 353 (SC) has been followed, was a case of a cinema theatre fully equipped and let. In both the aforesaid cases, the issue was not whether there was letting of the building and a letting of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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