TMI Blog1982 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... se of computation. The assessee claimed that they were to be assessed as business income. The ITO and the AAC rejected the assessee's claim. But the Income-tax Appellate Tribunal accepted the assessee's contention and directed the assessment of the rental income as business income with all that it involved, including allowance of depreciation on buildings and machinery. The Tribunal, in their order, have set out the grounds for their determination. The Department's contention in these references is that the Tribunal's decision is erroneous in point of law. As earlier indicated, the dispute in the present case is not about the taxability in the assessee's hands of the rents from the two film studios, but under which particular statutory he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismiss questions of this nature as pure questions of fact. Mistaking the nature of the questions, the Tribunal at an earlier stage, had dismissed the Department's reference applications in this very case. But this court administered the necessary corrective by calling upon the Tribunal to state a case referring the questions of law propounded by the Department for consideration by this court. There can be no doubt that questions of this kind are really mixed questions of law and fact. The reason is that, given the findings on primary facts, it is in every case, a matter of legal inference or judicial determination, as to what the appropriate statutory head of income is to which those facts unmistakably point. To the facts, then, we must t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized one of them for a time to shoot a film of his own by name 'Engal Veettu Pillai '. The Tribunal took note of all these facts and, on an analytical consideration thereof, came to the conclusion that the lease by the assessee of the studios was in the course of his film business, and not as a mere owner letting out immovable property. In the course of their order, the Tribunal set down certain observations of a somewhat more general kind. They said that a film studio is not a mere building, but is a complex subject. They referred to the electrical equipments, the lighting arrangements, the sound record equipment, the projection theatre and other aspects of the studios. They referred to the prevailing practice of studio owners not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of carrying on film studio business, as such, and those which have to do with the assessee's own antecedents in the various lines of film trade. The Tribunal had not made the mistake of supposing that film studios, per se, are business assets in themselves. What they expressed, in the course of their general observations, was that there is more than one recognised way of running film studios as business propositions on commercial lines, one being to shoot one's own pictures in the studios and the other being to let it out to other film makers. The Tribunal pointed out that the assessee in this case had been utilizing these two studios as a lessee on earlier occasions and even after purchase he had made a film of his own in one of them. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht in holding that the income received by the assessee from Vahini Studios and Vijaya Studios should be assessed in the hands of the assessee as " business income " ? Assessment year 1969-70: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the income derived by the assessee during the year of account relevant to the assessment year 1969-70 by letting out Vijaya Studios has to be assessed as business income and depreciation on the studios should be allowed. " For the reasons stated earlier, our answers to the two question are in the affirmative and in favour of the assessee. The Department will pay the costs of the assessee. Counsel's fee Rs. 500 (one set). - - TaxTMI - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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