COMMISSIONER OF INCOME TAX Vs. S K SAHANA AND SONS P LTD

JUDGEMENT

(1.) THIS is a reference under S. 256 (1) of the INCOME TAX ACT, 1961, made by the Tribunal, Patna, and a statement of the case has been submitted to this Court for our opinion on a question in these terms :

(2.) THE assessee is a public limited company. The assessment year involved is 1965 -66. The assessee owned a colliery at Dhanbad. It allowed a firm of managing agents to manage the said colliery and received a sum of Rs. 97,228 as commission deducting Rs. 20,000 for expenses. The ITO determined the income from this source at Rs. 77,228. The ITO held the income to be taxable under the head other sources' and not as business income as claimed by the assessee for the same reasons as discussed in the earlier assessment year. A copy of the order of the ITO is enclosed as Annexure -A to the statement of the case on appeal, the AAC confirmed the finding of the ITO. A copy of the order of the AAC has been enclosed as Annexure -B to the statement of the case. On further appeal, the Tribunal, relying on its previous order for the asst. yrs. 1963 -64 & 1964 -65, confirmed the order of the AAC. A copy of the order of the Tribunal has been annexed and marked as Annexure -C.

(3.) B . P. Rajgarhia, learned senior standing counsel for the Revenue, cited before us two decisions, one of this Court and the other of the Supreme Court. The decision of this Court is Khas Benedih Colliery vs. CIT Bihar Bihar Bar Counsel Journal 440 and that of the Supreme Court -New Savan Sugar and Gur Refinding Co. Ltd. vs. CIT (1969) 74 ITR 7 (SC). We do not see any relevance of those decision is this case. Hence, as this case is clearly covered by a Bench decisions of this Court in the case of CIT Bihar vs. S. K. Sahana & Sons Ltd. (1976) 102 ITR 437 (Pat), We answer the question, referred to us, in favour of the assessee and against the Revenue and hold that it was a business income. The assessee shall be entitled to his cost. Hearing fee assessed at Rs. 250.