Law:

Section:

JUDGMENT N. Kumar, J. - These three appeals are preferred by the revenue challenging the order passed by the Tribunal holding that the income derived by the assessee from letting out the plant, machinery, furniture and building including the excise licence is to be treated as income under the head 'profits and gains of the business'. 2. The facts are not in dispute. The assessee was engaged in the manufacture and sale of IMFL products. In the early 1980's in order to get rid of militant labour, the assessee let out the entire factory along with excise licence and certain plant and machineries to the lessee, M/s McDowell and Company. The assessee filed his returns showing the said income under the heading 'profits and gains of business or profession'. Assessment orders were passed on that basis for the assessment years 1997-98 and 1998-99. The assessee was assessed accordingly. However, proceedings were initiated for re-opening of the assessment on the ground that the said income should have been assessed as 'income from other sources'. The assessee objected to the same. Objections were over-ruled and the income was assessed as 'income from other sources', thus denying the benefit of deductions. 3. Aggrieved by the said order, he preferred an appeal before the Commissioner of Income Tax (Appeals) who upheld the said order. It is against the said order, the assessee preferred an appeal to the Tribunal. 4. The Tribunal held that, up to 1997, the lease rental was assessed as business income. There is no change of facts so far as the years in question are concerned and, therefore, the reopening of the assessment on the basis of change of opinion is not permissible under law. No facts of the case were 'suppressed by the assessee so far as the relevant years are concerned and, therefore, it was held that the reopening is bad. After referring to the several judgments relied on, the Tribunal also held that the lease rentals from the letting out the assets was assessable to tax under the head 'profits and gains of the business' and, therefore, it held that there was no justification for reopening of the assessment. Aggrieved by the said order, the present three appeals…

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