Law:

Section:

Section 28(i) of the Income-tax Act, 1961 - Business income - Assessable as - Assessee-company leased out its colliery to another company by appointing it as managing contractor for a fixed period and, in turn, received certain yearly minimum guaranteed amount as also guaranteed profit on different products raised and manufactured by managing contractor in said colliery - Those payments were unrelated to profit or loss earned by managing contractor - Whether in view of lease terms according to which assessee abdicated control of its business in favour of managing contractor in lieu of annual minimum guaranteed amount and royalty, assessee could be said to be carrying on business of said colliery and its income received from said managing contractor was a business income - Held, on facts, no Words and phrases - 'Any business or profession which was carried on by the assessee' as occurring in section 28(i) of the Income-tax Act, 1961 Facts The assessee-company, which, inter alia, derived income from the mining establishment, leased out the colliery to another company by appoint- ing the latter as a managing contractor for 10 years with an option of renewal for a further period of three years. The deed described the assessee as the proprietor and the lessee as the managing contractor. It was mentioned that the colliery was lying closed and reopening permission had to be obtained from the proper authorities by the managing contractor. As there were no machineries existing at the said colliery, the managing contractor was entitled at its own cost to install such machineries, which were to remain its absolute properties, and on determination it was entitled to remove such machinery without any objection on the part of the assessee. The business of the said colliery was to be carried on by the managing contract in the existing old name at all costs. Charges and expenses for working of the said colliery and for carrying the said business were to be borne by it. It was also at full liberty to sell or otherwise dispose of the coal raised or manufactured in the colliery without let or hindrance and was entitled to realise the price of the products raised to enter into all…

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