Law: Income Tax Act, 1922

Section: 3,4,10

Income Tax Act, 1922 (XI of 1922)-Sections 3, 4, 10--Income-Capital or revenue income-Compensation--Assessee a lesses of colliery mine-Compensation paid to assessee towards price of movable and immovable properties, sterlization of assets and surrender of rights in the lease of colliery-Whether capital receipt-Held yes. B. Income Tax Act, 1922 (XI of 1922)-Sections 3, 4, 10--Income--Capital or revenue income-Private trust doing coal mining business on lease-Coal mining business taken over by Government and lease cancelled subsequently-Profits for the period from the date of dispossession to the date of cancellation of lease-Whether taxable in the hands of the assessee--Held yes. ORDER [The order was passed by MOHD MAZAR ALI, Judicial Member. M. KARIM, Accountant Members. passed a separate Concarring order]-This appeal is directed against an order of assessment passed in the case of a private trust, which has been treated as an Association of Persons Facts, relevant for the purposes of this order, may he briefly stated as following: A partnership firm, comprising of one Mr. A. a retired judge the Lahore High Court and Mr. B obtained a lease for mining coal in the Mainwali District. The business was developed and was subsequently known by the name of Colliers. The firm also came to own some coalmining business and other leasehold property, in Marri Indus. Each of the two partners owned half share in the business, but, an extra two and as share was given to the Hindu partner, to compensate him for management and supervision of the business. The lease was initially granted in 1916 for a period of thirty years, but could be renewed, for a further period of thirty years at the option of the lessees. The lease expired on 23-9-1946 but by an order of the Punjab Government, passed on the 24th of January, 1947, it was renewed for a further period of thirty years, which period would have expired, in the year 1976. Before his death Mr. A had created a trust in favour of his five nephews, which trust became a partner in the said firm, after the death of Mr. A. soon after petition, the properties of this firm, including the business of coal mining, were taken over, by the…

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