COMMISSIONER OF INCOME TAX Vs. MODEL JHARIA COLLIERY COMPANY

JUDGEMENT

(1.) A statement of the case has been submitted by the Income-tax Appellate Tribunal, 'A' Bench, Patna, under Section 256(1) of the Income-tax Act, 1961 (hereinafter to be called as "the Act"), referring the following questions of law for the opinion of this court:

(2.) THE relevant facts of the case can be culled out from the statement of the case. THE assessee claims to be a firm and the assessment year involved is 1967-68 corresponding to the accounting period ending December 31, 1966. THE assessee, by an agreement, appointed a managing contractor for extraction of coal and from him the assessee received certain commission. THE Income-tax Officer came to the conclusion that the assessee, by giving to a managing contractor the complete control over the mines of the colliery, ceased to carry on its business and, therefore, the income received by the assessee was assessable under the head "Other sources". He also held that as there was no intention to carry on business, there can be no firm as such and treated the status of the assessee as an association of persons. THE order of the Income-tax Officer has been annexed and marked as annexure 'A' forming part of the statement of the case.

(3.) MR. B.P. Rajgarhia on behalf of the Revenue has relied on the decision in Khas Benedih Colliery v. CIT, 1974 BBCJ 440 where the lease deed was produced and the various clauses of the lease deed were considered with reference to the various clauses in Ray Talkies v. CIT, 1974 96 ITR 499 and then it was held that the colliery having been let out on fixed income, the income received becomes income from "Other sources" and not from "Business" and no business being carried out by the partners, the firm is not entitled to renewal of registration.