ADDITIONAL COMMISSIONER OF INCOME TAX vs VIKRAM COTTON MILLS LTD.

Satish Chandra, J. - The assessee is a public limited company. Its source of income is lease money from the letting out of its cotton mill factory. For the assessment year 1962-63, the question was whether the income was assessable under the head "profits and gains of business" or under then head "income from other sources." The Tribunal held that the income was assessable under the head "profits and gains of business". The Tribunal, at the instance of the Department referred the question as to the proper head under which the income was assessable, to this Court.

In the Commissioner of Income Tax Lucknow vs. Messrs Vikram Cotton Mills Ltd., Lucknow a Bench of this Court held that the income derived by the assessee-company by way of lease rent is assessable under the head "profit and gains of business". In this view, the question of law referred to us in the present reference is answered by holding that the income in question was assessable under the head "profits and gains of business" and not under the head "income from other sources". The assessee will be entitled to costs which are assessed at Rs. 200/- (Rupees Two hundred only).