COMMISSIONER OF INCOME TAX vs S. K. SAHANA and SONS (P) LTD.

By the Court - This is a reference u/s 256(1) of the IT Act, 1961, made by the ITAT, Patna, and a statement of the case has been submitted to this court for our opinion on a question in these terms :

"Whether, on the facts and in the circumstances of this case, income of Rs. 77,228 derived from commission received from the Managing Agent is taxable under the head Income from other sources ?"

The assessee is a public limited company. The assessment year involved is 1965-66. The assessee owned a colliery at Dhanbad. It allowed a firm of Managing Agents to manage the said colliery and received a sum of Rs. 97,228 as commission deduction Rs. 20,000 for expenses. The ITO determined the income from this source at Rs. 77,228. The ITO held the income to be taxable under the head other sources and not as business income as claimed by the assessee for the same reasons as discussed in the earlier assessment years. A copy of the order of the ITO is enclosed as Annexure-A to the statement of the case. On appeal, the AAC confirmed the finding of the ITO. A copy of the order of the AAC has been enclosed as Annexure-B to the statement of the case. On further appeal, the ITAT, relying on its previous order for the asst. yrs. 1963-64 & 1964-65, confirmed the order of the AAC. A copy of the order of the Tribunal has been annexed and marked as Annwxure-C.

It is needless to go into the principles of law involved since the matter has been set at rest by a bench of this court to which one of us(S. K. Jha, J.) was a member for the same assessee for the two previous assessment years, namely, 1963-64 and 1964-65. That case is reported in CIT, Bihar v. S. K. Sahana & Sons Ltd. (1976) was also a party to that judgment. This case has clearly decided that such income is an income from business. This case is, thus, concluded by the judgment in that case.

Mr. B. P. Rajgarthia, ld. senior standing counsel for the revenue, cited before us two decisions, one of this court and the other of the Supreme Court. The decision of this court is M/s Khas Benedih Colliery, Dhanbad v. CIT, Bihar, Patna 1974 Bihar Bar counsel Journal 440 and that of the Supreme Court - New Savan Sugar and New Savan Sugar and Gur Refining Co., Ltd. Vs. Commissioner of Income Tax, Calcutta, . We do not see any relevance of those decisions in this case. Hence, as this case is clearly covered by a Bench decision of this court in the case of Commissioner of Income Tax Vs. S.K. Sahana and Sons Ltd., . we answer the question, referred to us, in favour of the assessee and against the revenue and hold that it was a business income. The assessee shall be entitled to his cost. Hearing fee assessed at Rs. 250.