- (1.) This appeal by certificate arises from the decision of the Calcutta High Court rendered in a reference made to it by the Income Tax Appellate Tribunal, 'B' Bench, Calcutta under S. 66 (1) of the Indian Income-tax Act, 1922 (which will hereinafter be referred to as the 'Act'). Along with its statement of case, the tribunal submitted two questions to the High Court for its opinion. They are : "(1). Whether on the facts and in the circumstances of the case, the sums of Rs. 2,55,733/- and Rs. 3,00,332/- receivable by the assessee as arrears of royalty and rent were assessable as the income of the assessee for the assessment years 1948-49 and 1950-51 respectively and (2) Whether on the facts and circumstances of the case the sum of Rupees 2,80,000/- being the surplus derived by the assessee on sale of property was assessable as the income of the assessee for the assessment year 1950-51."
(2.) The facts set out in the statement of the case, in brief, are as follows : The assessee M/s. Rajasthan Mines Ltd., is a public limited Company incorporated on January 23, 1947. The Raja of Ramgarh was the landlord of the North and South Karanpura fields covering about 312 villages. Those tracts of lands were rich in coal and fireclay. M/s. Karanpura Development Co. Ltd., held coal mining licence in about 14 of those villages. It also held fireclay leases in about 8 villages and leases of other minerals in portions of two villages. That Company had also a prospecting licence for the coal in the said fields with the option to take further coal mining leases. The leases were also held by three other parties namely South Karanpura Development Ltd., Janab Mohammad Kamruddin and Jagdish Prasad Bhagat in respect of other parcels of land, in these fields. By an indenture dated December 22, 1947 (registered on the 26th of February, 1948), in pursuance of agreements dated September 20, 1945 and August 7, 1947, the assessee acquired from the Raja of Ramgarh proprietary interest in all those leased out lands, more fully specified in the schedule appended to the said indenture. By the said indenture, the Raja of Ramgarh also transferred and assigned to the assessee his right to receive the arrears of rent and royalty from the lessees with effect from September 1, 1946. The consideration paid by the assessee for the acquisition of the proprietary rights with the right to realise and recover the arrears of rent and royalties was Rs. 5 lacs.
(3.) For the assessment year 1948-49, the Income-tax Officer assessed the entire amount of arrears of rent and royalty receivable from the said lessees, from September 1, 1946 upto the date of conveyance namely December 22, 1947, as the assessee income for the previous year ended on the 31st March, 1948. The net amount included in the assessment under that head was Rs. 2,55,733/-.;