- (1.) Leave granted. Heard the counsel for both the parties.
(2.) The Commissioner of Income Tax, Calcutta, has preferred this appeal against the judgment of the Calcutta High court in Income Tax Reference No. 88 of 1986, answering the question referred to at the instance of the assessee, in favour of the assessee. The question referred to under Section 256 (1 of the Income Tax Act is: "Whether on the facts and in the circumstances of the case, the tribunal was justified in law in holding that the income as received by M/s Surrendra Overseas Limited, be assessed as the income of the assessee from business from leasehold interest -
(3.) Under a deed of assignment, dated 3/9/1966. the assessee obtained the leasehold interest, for the unexpired period of lease, in respect of premises Nos. 3, 5, 7, 9, 11, 13 and 15, Park Street, Calcutta, from Credit Transactors. In the accounting year relevant to the Assessment Year 1971-72, the assessee executed a sub-lease in respect of a portion of its leasehold interest in favour of M/s Surrendra Overseas Limited, another limited company "associated with the assessee". The deed of sub-lease was, however, not registered though it is said that M/s Surrendra Overseas Limited paid a premium of Rs. 63,13,000. 00 and was also paying a rent of Rs. 15,000. 00 p. a. in consideration of the said sub-lease. M/s Surrendra Overseas Limited, was receiving the rental income from the property sub-leased to it. The income so received by M/s Surrendra Overseas Limited was sought to be taxed in its hands as "income from house property", to which Surrendra Overseas objected. The matter was carried to the tribunal, which held in HA No. 519 (Cal. ) /1976-77, that since M/s Surrendra Overseas Limited, is not the owner of the said house property, the income from that house property cannot be taxed in its hands. An application for making a reference under Section 256 (1 of the Act filed by the Revenue was rejected by the tribunal.;