Chakravartti, C.J. - (1.) Of the two questions referred in this case at the instance of the assessee, Dr. Pal abandoned one at the very commencement of his 'argument. On the other, we have been addressed by both sides at considerable length. That question concerns the nature of a receipt which came into the hands of the assessee under the provisions of one of the clauses of a deed by which the assessee transferred certain rights and. concessions to a third party.
(2.) The assessee Messrs. National Cement Mines Industries Ltd. is a public limited company, incorporated on 27-12-1931, The Memorandum of Association sets out 53 objects of the venture but Clause 3(1) states that the principal object was to "carry on the businesses of cement and lime manufacture and also of limestone supply and for the purposes of such businesses to acquire rights and concessions pertaining to limestone, coal and surface lands from the Dewarkhand Karanpura Mines and Industries Limited". Among the other objects which I need mention here was one to work mines or quarries and to find, win, get, work, etc., or otherwise deal with clay and bauxite. The statement of the case says that the business of the company is to manufacture 'limestone' which is not easy to understand, but there can be no question that the company is a manufacturing and trading concern producing and dealing with lime, coal and mineral substances of various kinds.
(3.) The rights and concessions of the Dewarkhand Karanpura Mines and Industries Ltd. which, for brevity's sake, I shall hereafter call the Karanpura Company, were such rights and concessions under three deeds, all executed on 29-11-1930. It appears that, on that date, the Karanpura Company acquired a mining lease which has been called the 'Limestone Lease' from one Maharaja Per-tap Narain Udai Nath Shah Deo in respect of limestone beds in certain villages in Dewarkhand with the rights, privileges and liberties mentioned in the relevant deed. On the same date, the Company acquired from one Maharaj Kumar Nand Kishore Nath Shah Deo the surface rights necessary to exercise the powers and privileges of the principal lease in respect of all the villages covered thereby except Hoyer and similarly it obtained from one Maharaj Kumar Raj Kishore Nath Shah Deo similar surface rights in respect of the Hoyer village. The period of these leases was 30 years and it was the rights under these which the assessee company intended to acquire. In fact, however, the Karanpura Company did not make any direct transfer to the assessee, but executed a deed of trust on 17-3-1932, whereby it conveyed the rights and options under the three documents to the assesses. Thereafter, in 30-9-1934, several transactions took place. On that date, the assessee company acquired, on its own account, from Maharaja Pertap Narayan Uday Nath Shah Deo and Maharaj Kumar Raj Kishore Nath Shah Deo the limestone and surface rights in a certain Pergana called Umedanda for a period of 95 years. This lease has been referred to in these proceedings as the 'Umedanda lease. On the same date, the assessee also entered into an agreement with Maharaja Pratap Narayan which has been called the 'Bauxite option agreement' and thereby it acquired the first option, to take a lease or leases of any area or areas of bauxite deposits in certain villages. It also acquired from the same Maharaja the first option of taking a lease or leases of limestone beds in the Tori District and that transaction has been called the Tori Option agreement. There was a fourth agreement executed on 30-9-1934, between the Karanpura Company, Maharaja Pertap Narayan Udai Nath Shah Deo acting with the consent of Maharaj Kumars Raj Kishore Nath Shah Deo and Nand Kishore Nath Shah Deo and the assessee by which, the royalties reserved by the original limestone lease were reduced from six annas or seven annas per ton of cement to an uniform rate of three annas per ton and at the same time the period of the lease was extended to 99 years as computed from 29-11-1930, which was the date of the original deed. The period of the Umedanda lease obtained by the assessee was 95 years. The result therefore was that on 30-11-1934, all the leases and agreements came to be leases and agreements for that period.;