2004 (11) TMI 71

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....ies) together with the machinery therein was rightly assessable in the hands of the assessee under the head 'Income from business' in the light of the fact that letting out of the machinery was inseparable from the letting out of the cinema hall?" The assessment year involved in the present reference is 1981-82. The brief facts of the case are as follows: The assessee-respondent derived income from a picture hall, namely, Sant Talkies. She became the owner of Sant Talkies with effect from July 31, 1979. Earlier Sant Talkies was the property of a partnership firm, namely, M/s. Surendra Kumar Sureshini Mittal. The said partnership firm was not carrying on the business of film exhibition in that cinema hall but hired it out to M/s. Sant Talk....

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....eard Shri Dhananjay Awasthi, learned standing counsel for the Department in support of the reference. Nobody appears for the assessee-respondent. The Tribunal has placed reliance on clause 5 of the deed of partnership of dissolved firm. This was to the effect that the business of partnership would consist of exhibition of motion pictures including leasing out of the picture hall also. It was very much influenced by the fact that the income earned by the erstwhile partnership firm, namely, M/s. Surendra Kumar Sureshini Mittal, in which the assessee was a partner for the earlier years was treated by the Department as income from business. The assessee succeeded to the assets and liabilities of the dissolved firm. The picture hall along with ....