JUDGMENT

The judgment of the court was delivery by

MANCHANDA J. - This is a case stated u/s 66 (2) of the Indian Income Tax Act, 1922 (hereinafter referred to as the Act). The question of law referred is :

"Whether, on the facts and in the circumstances of the case, the income from the quarries of Rs. 20,360 was includible in the assessment of the assessee under the provisions of section 16 (3) (iii) of the Act ?"

The material facts are these : The relevant assessment year is 1948-49, the previous year being the financial year 1947-48. By a registered lease deed dated 16th April, 1947, the assessee made a lease of certain quarries in favour of his wife in perpetuity. Paragraph 3 of the deed reads :

"That the lessee is highly educated and accomplished daughter of Ruling Chief of Alas State in Kathiawar, famous for its industry and business instinct.

In consideration of the royalty and lessees convenient hereafter reserved and contained the lessor hereby transfers to the lessee the quarries of stone, ballasts, kankar morum and sand, etc., described in the schedule A hereto mentioned with the said quarries subject to the restrictions and conditions as to the exercise and enjoyment of the sa