SANKAR PRASAD MITRA, C. J.

( 1 ) THIS is a reference under Section 256 (1) of the Income-tax Act, 1961. The assessee is a limited company. The assessment year is 1963-64. The relevant accounting year is the calendar year 1962.

( 2 ) THE assessee owns lands and buildings and derives income by way of rent from house properties, dealings in land, as well as income from other sources including dividend.

( 3 ) THE house properties were at Bombay, Delhi and Calcutta. One of the points of dispute is, whether the income derived from letting out of the buildings is to be computed under Section 22 or 28 or 56 of the Income-tax Act, 1961. , i. e. , whether it should be taxed as income from house property or income from business or income from other sources. The Income-tax Officer has taxed the income as income from house property under Section 22.

( 4 ) IN the Income-tax Officer's assessment order we find three items, viz. , (1) Gross rental; (2) Lift charges received ; and (3) Air-conditioning charges received. The total of the three is Rs. 11,17,679. Then the Income-tax Officer gives deductions in respect of (a) electric charges ; (b) lift upkeep expenses ; (c) water charges ; and (d) air-conditioning charges. He has also allowed other deductions to arrive at the taxable income.

( 5 ) BEFORE the Appellate Assistant Commissioner it was urged that the income from property should have been assessed under Section 28, i. e. , income from business, and not under Section 22, i. e. , income from house property and consequently depreciation on buildings and fixtures such as air-conditioners, lifts, electrical equipments, etc. , and other expenses as allowable under Section 28 should have been allowed. An alternative claim was that the entire income from house property should be assessed under Section 56, i. e. , income from other sources, after allowing all the expenses mentioned under Section 57 of the Income-tax Act. A third alternative claim was that at least income from letting out of air-conditioner and lift should be assessed under Section 56. The Appellate Assistant Commissioner held that the Income-tax Officer was justified in treating the entire income arising from ownership of the property as income assessable under Section 22 of the Income-tax Act, 1961.

( 6 ) THE Tribunal was of the opinion that the assessee's claim that the letting out of the property to tenants comprised business carried on by the assessee could not be accepted. The Tribunal then considered the assessee's claim that the income should be treated as "income from other sources" and taxed under Section 56, The Tribunal has held that there was no income that could be assessed under the head "income from other sources" under Section 56. The Tribunal's view is that the assessee's income has to be taxed under Section 22, that is, income from house property.

( 7 ) THE following questions have been referred to us :" (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the income derived from letting out of the building is properly to be computed under Section 22 and not under Section 28 or under Section 56 of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the lift charges and the air-conditioning charges should be separately assessed under Section 56 of the Income-tax Act, 1961 ?"

( 8 ) SECTION 56 (that is, income from other sources) of the Income-tax Act, 1961, relevant for our purposes, is as follows :"56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head 'income from other sources', if it is not chargeable to income-tax under any of the heads specified in Section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes shall be chargeable to income-tax under the head 'income from other sources', namely :.

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