Law:

Section:

Section 256(2) of the income-tax act, 1961-Reference-Question of fact-Assesses had fitted a rotary printing press in a portion of its building-He constituted a partnership with his son relating to rotary printing press and leased out machinery and building portion together-Tribunal held that lease rent received by assessee was not to be included in annual letting value of property as machinery and property were being used by assessee for business purposes-Whether a question of law arose from tribunal's order-Held, on facts, no Facts The assessee had originally let out a portion of his building on a monthly rent of Rs. 1,860. In that portion he had fitted a rotary printing press for which he received a monthly rent of Rs. 7,500. From the assessment year 1968-69 onwards, the assessee and his son constituted a partnership relating to the rotary printing press. This partnership firm then took over the machinery and also the said portion of the property and leased out the same at Rs. 12,500 per month. The assessee claimed that since the machinery and the property were being used for business purposes, the rental of this portion of the property could not be included in the annual letting value of the property. The ITO rejected the claim but the AAC held that the amount of Rs. 12,500 included the rent of Rs. 1,860 and the whole amount was a business income. Hence, he allowed a corresponding reduction in the annual letting value. The Tribunal also confirmed the AAC's findings. The Tribunal also rejected the department's plea to make a reference. On an application under section 256(2): Held Originally, a portion of the building was let out by the assessee himself, and so the income had to be assessed as income from house property under section 22. Subsequently, there was a composite letting by the assessee in partnership with his son. Even if the assessee had let this property out as an individual, the income would be assessable either under the head 'Income from other sources' or under the head 'Profits and gains of business or profession'. In no case could it be assessed under section 22. Inasmuch as the composite letting of the building plus machinery, etc., was by a…

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