1987 (5) TMI 10

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....cumstances of the case, the Tribunal was justified in holding that the income of the assessee which was received from the managing contractors, M/s. Sinha Coal Syndicate, on the basis of the agreement dated June, 8, 1969, for extraction of coal was assessable under the head 'Business' and not under the head 'Other sources' relating to the assessment years 1970-71 and 1971-72 ? " The assessee is a company. It owned a colliery known as Dobery Colliery. In June, 1969, the assessee entered into an agreement with M/s. Sinha Coal Syndicate. In terms of the agreement, the assessee was to receive a fixed minimum guaranteed sum as royalty. The agreement has been described by the Revenue as an agreement of lease. It was contended that that was not....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f coal and coke despatched excepting hard coke for which the rate of commission will remain the same. That in case the amount payable to the principal for coke, etc., shall exceed annually the sum of Rs. 75,000 or Rupees one lakh hereinbefore provided for, the managing contractors shall be bound to pay such excess amount that may be due to the principal within the 28th day of February each year and all such accounts shall be adjusted at the end of each English calendar year within the 15th day of January of every following year. It is further agreed and understood that if there shall be a complete stoppage of work due to fire, inundation or for any other reasons beyond human control or on account of lock-out or strike, then from after th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., we are of the view that the agreement entered into is a lease of the colliery. In that view of the matter, the income received by the assessee in the form of minimum guarantee could not be income from business. It was clearly income from " other sources".. The Income-tax Officer assessed the said income as income from " other sources ". His verdict was set aside by the Appellate Assistant Commissioner. The Tribunal affirmed the order of the Appellate Assistant Commissioner relying upon a decision of this court in Ray Talkies v. CIT [1974] 96 ITR 499. Subsequently, this court in the case of CIT v. S.K. Sahana and Sons Ltd. [1976] 102 ITR 437 held that the income from leasing out of a colliery was income from business. The two decisions of ....