Judgement

SABYASACHI MUKHARJI, J.:- These appeals by special leave arise from the judgment and order of the Allahabad High Court at the instance of the revenue. The Income-tax Appellate Tribunal, Bombay Bench, referred the following question of law for the opinion of the Allahabad High Court :-

(The question related to the assessment years 1960-61, 1961-62, 1962-63 and 1963-64).

"Whether, on the facts and in the circumstances of the case, the income derived by the assessee company by way of lease rent from the letting out of its assets during the years ended 31-12-59, 31-12-60, 31-12-61 and 31-12-62 is assessable to tax under the head profits and gains of business or under the head Income from other sources"?"

2. The assessee company was a limited company. It carried on the business of manufacture of textiles. From 1949, the assessee company started running into losses. At the end of Dec. 1953, the position was that as against the capital of Rs. 11,00,000/- the accumulated liabilities of the assessee company amounted to Rs. 26,00,000/-. Because of this the assessee company stopped its manufacturing actively from December, 1953. This state of affair continued till 21-5-56 when one of t