JUDGMENT
BY THE COURT :
Heard learned counsel for the applicant. No one appears for the respondent despite service of notice.
2. The facts of the case are that the assessee had acquired the mill on lease in question in 1960 from the receiver, in the whose possession the property in question was at the relevant time. After obtaining the said property known as Mill No. 3, he further leased out the said property to one M/s Suresh Spinning Mills, Agra. The assessee has claimed the income arising from by leasing out the property, which he has acquired on lease in an auction to be income from carrying on a business and to be assessed as such. However, the Income Tax Officer has held the same to be ‘income from other sources’ since leasing out the property is not the business of the assessee which he carries on.
2. The facts of the case are that the assessee had acquired the mill on lease in question in 1960 from the receiver, in the whose possession the property in question was at the relevant time. After obtaining the said property known as Mill No. 3, he further leased out the said property to one M/s Suresh Spinning Mills, Agra. The assessee has claimed the income arising from by leasing out the property, which he has acquired on lease in an auction to be income from carrying on a business and to be assessed as such. However, the Income Tax Officer has held the same to be ‘income from other sources’ since leasing out the property is not the business of the assessee which he carries on.
The appellate authority namely the Appellate Assistant Commissioner allowed the appeal of assessee by following the order rendered by the Tribunal in IT No. 151/1976-77 for the assessment year 1972-73 by which the Tribunal has accepted the claim of the assessee to treat the income as income from business.
An application for making a reference to this court of a question of law said to be arising out of that order under section 256(1) of the Income Tax Act has been rejected by the Tribunal by holding that no question of law arose out of the Tribunal’s order. However, the said order of the Tribunal refusing to refer the question of law was held to be erroneous by a Bench of this court vide its order dated 10-2-1981, on an application filed under section 256(2) and has directed the Tribunal to refer the following question of law which is its opinion arose out of the Tribunal’s order.
“Whether, on the facts and in circumstances of the case, the Tribunal was justified in holding that the income of the assessee is assessable under section 28 of the Income Tax Act, 1961.”
The same question is required to be referred by the Tribunal for the subsequent assessment year 1978-79 in the present application.
3. We find that DBIT No. 6/82 is pending in this court in relation to assessment years 1972-73 to 1976-77 raising the same question in relation to the same transactions year after year.
3. We find that DBIT No. 6/82 is pending in this court in relation to assessment years 1972-73 to 1976-77 raising the same question in relation to the same transactions year after year.
4. Apparently, whether the income earned by leasing, is an income from business or not, is a mixed question of law and fact particularly when there is no finding that leasing out the property is an activity which the assessee is carrying on as a business.
4. Apparently, whether the income earned by leasing, is an income from business or not, is a mixed question of law and fact particularly when there is no finding that leasing out the property is an activity which the assessee is carrying on as a business.
We are, therefore, of the opinion that the Tribunal has erred in refusing to make a reference of the aforesaid question which is a question of law arising out of its appellate order. We allow this application and direct the Tribunal to state the case and refer the question of law as stated below for the opinion of this court.
“Whether on the facts and in circumstances of the case, the Tribunal was justified in holding that the income of the assessee is assessable under section 28 of the Income Tax Act, 1961.”
In the facts and circumstances, we, further, direct the Tribunal to make a reference of the aforesaid question by submitting a statement of case on or before 30th June, so that this reference can also be heard alongwith other matters of assessee raising the same fact are pending before this court for long. There is n order as to costs.