Judgment-

Tuizapurkar, J.-

( 1 ) THESE appeals by special leave involve a common question regarding the taxability of certain amounts received by the appellant company (hereinafter referred to as "the assessee") during the three accounting years, namely, 1359 B. S. , 1360 B. S. and 1361 B. S. relevant to the assessment years 1953-54. 1954-55 and 1955-56 and the question is whether those amounts represented business income or receipts of a capital nature ?

( 2 ) THE facts giving rise to the question may briefly be stated: The assessee was incorporated on 3/07/1920 for the purpose of taking over the Zamindari properties pertaining to the Ukhara Estate which belonged to Rai Pullin Behari Singha Bahadur and the late Gosta Behari Lal Singha. Therefore, on incorporation, by an Indenture dated 5/07/1920 the assessee took a lease of the extensive Zamindari pertaining to the said Estate for a term of 999 years and also took an assignment of moveables, including government promissory notes and jewellery belonging to the members of the lessors family and the arrears of rents and cesses, debts, decrees, etc. due by the tenants of the said Estate, the properties passing to the assessee being specified in the schedule appended thereto. The consideration for the said lease and assignment was fixed at Rs. 4,08,000. 00 which was paid and satisfied by the assessee by allotting and issuing its 4080 fully paid up shares to the lessors. The quit rent receivable by the lessors for the lease was Rs. 100. 00 per annum and the assessee also undertook to pay the revenue and cesses payable to the superior landlords in respect of the Zamindari. Clause 3 of the Memorandum of Association set out the various objects for which the assessee was formed and though sub-clause (a) thereof showed that the assessee was primarily incorporated for the purpose of taking over the assets of the lessors family upon the terms and conditions set forth in the Draft Agreement referred to in Article 3 of the Articles of Association, sub-clause (b) of Clause 3 of the Memorandum empowered the assessee "to purchase, take on lease or otherwise acquire and to traffic in land. house and other property. . . and generally to deal in or traffic by way of sub-lease, exchange or otherwise with land and house property. . . ". The Estate taken on lease comprised substantial coal bearing lands and mines which the assessee started giving on sub-lease in various parcels to well-known colliery companies for various terms of long duration. During the three accounting years in question the assessee granted several sub-leases for which it received salami and premia and there were also acquisitions of the portion? of the Estate by the Land Acquisition Collector for which it received compensation. The total amount of salami, premia and the compensation received by the assessee in the three accounting years were respectively Rs. 22,197. 00, Rs. 1,88,417. 00 and Rs. 73,327. 00 and the question arose whether these receipts were business income or receipts of a capital nature. The Income Tax Officer rejected the contention of the assessee that the receipts were of a capital nature and he included the said amounts in the total income of the assessee in each year as its business income holding that the assessee carried on business in leasehold rights and real property. On appeal by the assessee, however, the Appellate Assistant Commissioner reversed the finding of the Income Tax Officer and excluded the amounts in question from the total income of the assessee following the decision of the tribunal rendered on 7/06/1960, in the assessees case for the earlier assessment years 1946- 7,1947-48 and 1948-49. The matter was carried by the Income Tax Officer in further appeals to the tribunal, but the tribunal by its common order dated 29/06/1963 dismissed the departmental appeals holding that the receipts were of a capital nature not liable to be included in the taxable income of the assessee. In coming to that