Law:

Section:

Income-tax---Business income or income from other sources-Lease of factory by assesses company for 18 years-income from lease, held, income from business and not income from other sources. A I R 1969 S C 1062 Explained. A I R 1951 S C 454; fol. 116 1 TR781 ; 1121TR701;(1978) i14 1TR 769 (Cal.) ;741 TR 7,3,11; (1968)691 TR247;I1962)461TR 1181 ;(1961) 41 1 TR645; (1958) 34 I T R 155 ; 20 I T R 451 and Sutherland v. Commissioner of Inland Revenue (1928) 12 Tax Cas. 63 ref JUDGMENT JEEVAN RUDDY, J.-The question referred to in both these referred cases is the same, namely, whether in the facts and circumstances of the case and on a proper interpretation of the terms of the lease agreements, the appellate Tribunal was justified in holding that the income from the lease was assessable under the bead 'business' for the assessment years 1910-71, 1971-72. 1972-73 and 1973-74. The assesses is Aryan Industries Limited, Secunderabad, incorporated in 1951 in the former State of Hyderabad. The first object in its Memorandum of Association is to establish oil mills and carry on in Hyderabad Start or any other State in the Indian union or elsewhere, the trade and business of manufacturing, crushing, refining and hardening oils, refined, high power, lubrication fuel, and all other oils, their combinations and by products either by chemicals or any other proceeds as the company may from time to time think fit. Having established a factory for that purpose, the assessed carried on the business until about 1962 by which year it ran into certain financial difficulties and was unable to meet its obligations. The assessee entered into as agreement dated 7-12-1962 with Tungabhadra Industries Limited, Kurnool (hereinafter referred to as "the Licensee") whereunder the Licensee was al­lowed to carry on the business of the said factory on certain terms and conditions, for a period of one year. It provided for extension of agreement for one more year, which option was availed of by tae licensee. On 19-3-1964 a fresh agreement was entered into for a period of three years with effect from 1-10-1963 (The godown, which was not the subject matter of earlier agreement was also added by another…

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