TMI Blog1976 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Tribunal that the income from such leasehold properties converted into residential and trading sites, is assessable under the head " House Property " is sustainable in law ? (2) Whether, on the facts and in the circumstances of the case, and on an interpretation of the various leases and sub-leases and indentures, the entire income from pucca building should have been assessed under section 9 of the Indian Income-tax Act, 1922, or section 22 of the new Act ? (3) Whether, on the facts and in the circumstances of the case, the temporary structures are buildings within the meaning of section 9 of the Indian Income-tax Act, 1922, and the income therefrom is liable to be assessed as owners of property under section 9 of the Indian Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see by the ITO. The AAC followed an order of the Appellate Tribunal in respect of an earlier assessment of the same assessee for the assessment years 1956-57 to 1959-60. On further appeal to the Appellate Tribunal, the earlier order of the Tribunal was again followed. This order of the Tribunal has resulted in this reference at the instance of the assessee. To appreciate the contentions of the assessee, s. 9 of the Indian I.T. Act, 1922, may be noted. This section reads, as follows : " 9. Property.--(1) The tax shall be payable by an assessee under the head 'Income from property' in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned standing counsel also urged, though faintly, that from the data available in respect of the structures it could not be held that they were meant to be let out from year to year as contemplated in s. 9. The structures were meant to last only for one season as they were not likely to survive the heavy rains in the rainy season. Lastly, the learned standing counsel contended that assuming everything against the assessee, it was apparent from the memorandum of association of the assessee and the nature of the transactions it had, that the assessee was only carrying on its business in letting out the structures to different persons. It was not the case that the assessee was merely enjoying the income from property as an owner. On this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove description of the said structures it will appear that these structures are temporary structures. I say from my experience of valuing these sorts of huts that their longivity cannot exceed five or six years. Specially in Assam, where rainfall is unduly heavy. " From this report, it is obvious that the structures on these lands can be let out at least for 5 to 6 years once they are put up and it cannot be said that such structures are only seasonal structures which disintegrate in heavy rains and do not survive the annual rainy season. The Tribunal in any event has considered the definition of Lord Esher noted above and has found as a fact that these structures have a longer term of life. The Tribunal has also noted the nature of mat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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