DAL CHAND AND SONS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Delhi Bench "C", under sub-section (1) of section 61 of the Income-tax Act, 1922 (Act XI of 1922), by its order on August 3, 1962, on these questions to this court :

(2.) THE facts have been found by the Income-tax Appellate Tribunal and obviously are no longer a matter of controversy between the parties. THE reference has been made by the Income-tax Appellate Tribunal at the instance of the assessee, Dal Chand and Sons of Ferozepore Cantt.

(3.) "It installed plant and machinery for the purpose of its business and it was open to it if at any time it found that any port of its plant for the time being could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commercial asset it not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee-company was incorporated with any other objective then of carrying on business or trade. Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income-tax Act other than section 10."