UPADHYA, J.

( 1 ) THE questions referred for the opinion of this Court are1. Whether on the facts and circumstances of this case the oil mill is a commercial asset?

( 2 ) WHETHER from the facts and circumstances of this case the income arising oat of the letting out of the oil mill is an income from business within the meaning of Section 2 (5) of the Excess profits Tax Act and hence taxable under the Act?

2. This case relates to assessments under the Excess Profits Tax Act for the chargeable accounting periods ending 12th September 1945 and 31st March 1946. The assessee runs a flour mill and during the chargeable accounting period immediately preceding those in question in this case he constructed an oil mill but instead of running it himself leased it out to Messrs. Krishan mohan Bhuvan Shah. The rent received was subjected to income-tax under the Income-tax Act and there is no dispute about that assessment. The Excess Profits Tax Officer subjected that income from lease to tax under the Excess Profits Tax Act, treating it as income from business on which alone excess profits tax could be levied. The assessees appeal to the Appellate assistant Commissioner was unsuccessful as the learned Assistant Commissioner held that the oil mill was a commercial asset and income therefrom was income within the meaning of the excess Profits Tax Act. This view was upheld by the Income-tax Appellate Tribunal. At the request of the assessee the questions mentioned above have been referred under Section 66 (1) of the Income-tax Act read with Section 21. of the Excess Profits Tax Act for the opinion of this court.

( 3 ) IN making the reference the facts set Out in the statement of the case were rather meagre and all the facts which were found or admitted and which would have enabled the Court better to answer the questions referred, were not stated. A supplementary paper-book was therefore submitted on behalf of the assessee which contains copies of the Appellate order of the Tribunal and the two orders of the Appellate Assistant Commissioner relating to the two chargeable accounting periods in question.

( 4 ) THE Appellate order of the Tribunal does not contain a detailed statement of the facts again, the assessees contention in appeal appears to have been that the income from the hire of the oil mill was income from other sources and was not taxable under the Excess Profits Tax Act. The tribunal, however expressed its concurrence with the view by the Appellate Assistant commissioner who had found that the amount in dispute had been received by the assessee by hiring a commercial asset. The Tribunal also mentioned that it appears that allowance had been made against the income received as rent. The Tribunal referred to the decision of the Bombay high Court in Shree Laxmi Silk Mills Bombay v. Commissioner of Excess Profits Tax Bombay, (1948) 16 ITR 98 : (AIR 1949 Bom. 12) and observed that the decision in that case fully covered the present case.

( 5 ) THE Appellate Assistant Commissioner has mentioned in his order dated Oct. 8, 1949, relating to the chargeable accounting period ending 12th Sept. 1945, that

"the calculation of the capital employed in the business is also inclusive of the capital invested in setting up these mills. "

Ho also found that "there was no difficulty or incapacity on the part of the assessee which would not have enabled them to work the mills. " a further fact which is very material was found by the learned Assistant Commissioner when he said "it was out of the capital employed in this business (he means the flour mill business) that money was found for setting up these mills. " in his order relating to the other chargeable accounting period the learned Assistant commissioner observed that the assessee had himself started working these oil mills during that chargeable accounting period and took the view that this fact strengthened the inference that these mills were in fact a commercial asset within the meaning of the law.