Sultan Brothers (P) Ltd. Vs.
Commissioner of Income-Tax [1963] INSC 242 (6 December 1963)
06/12/1963 SARKAR, A.K.
SARKAR, A.K.
SINHA, BHUVNESHWAR P.(CJ) HIDAYATULLAH, M.
GUPTA, K.C. DAS AYYANGAR, N. RAJAGOPALA
CITATION: 1964 AIR 1389 1964 SCR (5) 807
CITATOR INFO:
RF 1967 SC 193 (22) R 1972 SC2315 (13)
ACT:
Income Tax-Assessment-Letting of building and
furniture-Such letting, if business-Income Tax Act, 1922 (11 of 1922), ss. 10,
12(4).
HEADNOTE:
The appellant assessee let out a building
fully equipped and furnished, for a term of six years for running a hotel and
for certain ancillary purposes. The lease provided for a rent for the building
and a hire for the furniture and fixtures. In the assessment of the income
under the lease to income-tax, Held: Whether a particular letting is business
has to be decided in the circumstances of each case. It would not be the doing
808 of a business if it was exploitation of his property by an owner. A thing
cannot by its very nature be a commercial asset. A commercial asset is only an
asset used in a business and nothing else. An activity is not business because
it is concerned with an asset with which trade is commonly carried on.
The present letting of the building did not
amount to the doing of a business by the assessee and as such the income under
the lease could not be assessed under s. 10 of the Income-tax Act as the income
of a business.
Commissioner of Income-tax v. Mangalagiri Sri
Umamaheswara Gin and Rice Factory Ltd. (1927) I.L.R. 50 Mad. 529 and Commissioner
of Income-tax v. Basotto Brothers Ltd. Madras.
(1940) 8 I.T.R. 41, distinguished.
United Commercial Bank Ltd. v. Commissioner
of Income-tax, West Bengal, 32 I.T.R. 688. referred to.
Even if the object of the assessee, a
company, which was to acquire lands and buildings, and to turn them into
account by leasing, be assumed to be a business activity, that would not turn
the income from the lease to income from business.
East Indian Housing & Land Development
Trust Ltd. v. Commissioner of Income-tax, (1961) 42 I.T.R. 49, relied on.
The income from the hire of the furniture and
fixture was assessable under s. 12 of the Act after providing for the
allowances mentioned in sub-s. (3) of that section.
Sub-section (4) of s. 12 is not confined to a
case where the building let out does not belong to the person who let it out.
The income contemplated in sub-s. (4) of s.
12 is an income which does not come within any of the earlier sections dealing
with specific heads of income.
In order that sub-s. (4) of s. 12 may apply,
it is not necessary that the primary letting must be of the machinery, plant or
furniture and together with such letting there is a letting of the building.
When sub-s. (4) of s. 12 says that "the
letting of the buildings is inseparable from the letting of the said machinery,
plant or furniture" it only means that the parties to the letting must
have so intended. There would be such an intention when they were intended to
be enjoyed together.
CIVIL. APPELLATE JURISDICTION : Civil Appeal
No. 63 of 1961.
Appeal from the judgment and order dated July
2,1959, of the Bombay High Court in Income-tax Reference No. 59/1958.
809 A.V. Viswanatha Sastri, T.S. Diwanji,
O.C. Mathur, J.B. Dadachanji and Ravinder, for the appellant.
K.N. Rajagopal Sastri and R.N. Sachthey, for
the respondent.
December 6, 1963. The Judgment of the Court
was delivered by.
SARKAR J.-The appellant, which is a limited
company is the owner of a certain building constructed on Plot No. 7 on the
Church Gate Reclamation in Bombay which it had fitted up with furniture and
fixtures for being run as a hotel. By a lease dated August 30, 1949, the
appellant let out the building fully equipped and furnished to one Voyantzis
for a term of six years certain from December 9, 1946 for running a hotel and
for certain other ancillary purposes. The lease provided for a monthly rent of
Rs. 5,950 for the building and a hire of Rs. 5,000 for the furniture and
fixtures. The question in this appeal is how the income received as rent and
hire is to be assessed, that is, under which section of the Income-tax Act,
1922 is it assessable. The appellant contends that the entire income should be
assessed under s. 10 as the income of a business or, in the alternative, the
income should be assessed under s. 12 as income from a residuary source, that
is, a source not specified in the preceding sections 7 to 11, with the
allowances respectively specified in sub-ss. (3) and (4) of that section.
For the assessment year 1953-54, the
appellant was taxed under s. 9 of the Income-tax Act in respect of the building
and under s. 12 in respect of the hire received from the furniture and
fixtures. The Income-tax Officer held that the building had to be assesses
under s. 9 as it was the specific section covering is and there was, therefore,
no scope for resorting to the residuary section, s. 12, in respect of its
income. The Appellate Assistant Commissioner held on appear that the rent from
a building could only be assessed under s. 12 with the allowances mentioned in
sub810 s. (4) where for the letting of the furniture and fixtures it was
indispensable to let the building also and as that was not the case here the
building had been rightly assessed under s. 9 . The appellant then appealed to
the Income-tax Appellate Tribunal. The Tribunal confirmed the decision of the
authorities below holding that the allowances mentioned in sub-s. (4) of s. 12
could not be allowed as the subsection permitted them only where the letting of
the building was incidental to the letting of the furniture and fixtures and as
that had not happened in the present case the rent could not be assessed under
s. 12. It was also contended by the appellant before the Tribunal--a contention
which does not appear to have been advanced at any earlier stage-that the
entire income should really have been assessed under s. 10 of the Act inasmuch
as the income taxed was from "the letting out of the totality of the
assets which was the business of the assessee". The Tribunal rejected this
contention also, holding that since there was a specific head in regard to
income from property, namely, s. 9, the income from the property leased had to
be computed under that section alone and referred to United Commercial Bank
Ltd. v. Commissioner of Income-tax, West Bengal(1) in support of this view.
Thereafter at the request of the appellant
the Tribunal stated a case under s. 66(1) of the Act to the High Court at
Bombay for decision of the following question:"Whether on the facts and
circumstances of the case, the income derived from letting of the building
constructed on Plot No. 7 is properly to be computed under section 9, 10 or
under section 12 of the Income -tax Act." The High Court answered the
question as follows:--"The income from the building will be computed under
section 9, income from furniture and fixtures under section 12(3) and that no
part of the income is taxable under section 10." (1) 32 I.T.R. 688.
811 The question framed is clearly somewhat
inaccurate for what the appellant con-tends in the first place is that the
entire income and not that from the building alone, should be assessed under s.
10. This inaccuracy has not however misled anyone and the matter has been
argued before us without any objection from the respondent on the basis as if
the question was in terms of the appellant's contention.
Now, it is beyond dispute that the several
heads of income mentioned in s. 6 of the Act and dealt with separately in ss. 7
to 12 are mutually exclusive, each head being specific to cover the income
arising from a particular source and that it cannot be said that any one of
these sections is more specific than another-. see United Commercial Bank Ltd.
v. Commissioner of Income-tax(1). Therefore a
particular variety of income must be assignable to one or other of these
sections.
A broad reference to ss. 9, 10 and 12 may now
be profitably made. Section 9 provides for the payment of tax under the head
"Income from property" in respect of the bona fide annual value of
buildings or lands appurtenant thereto of which the assessee is the owner.
Certain buildings are exempted but it is not necessary to refer to them. This
section also sets out the method. of calculation of the annual value of the
property on which the tax is to be assessed. It is important to note here that
under this section a building has to be assessed to tax on its annual value
irrespective of the rent received from it, if any.
Section 10 deals with profits and gains of
business, profession or vocation. This section also provides the method of
computing the income and the allowances that the assessee is entitled to deduct
in making the computation.
Section 12 is the residuary section covering
income profits and gains of every kind not assessable under any of the heads
specified earlier. It follows that if the income now under consideration is
taxable under s. 9 or s. 10, then it cannot be taxed under s. 12. This is not
in dispute.
(1) 32 I.T.R. 688.
812 The first contention of the appellant, as
already seen, is that the assessment should be made tinder s. 10 as of income
from a business. The reason for this preference is that under that section it
would be entitled to much larger allowances as deductions in the computation of
the income than it would be under either s. 9 or s. 12. The appellant put the
matter in this way. Letting out of a commercial asset is a business and what it
did was to let out a commercial asset, namely, a fully equipped hotel building.
It also said that the lessor's covenants in
the lease showed that in making the lease, the appellant was carrying on a
business and not letting out property. This is somewhat different from the way
in which it was put before the Tribunal. The argument advanced before the
Tribunal was not advanced in this Court and need not, therefore, be considered.
It is indeed not very clear.
A very large number of cases was referred to
in support of this contention but it does not seem to us that much assistance
can be derived from them. Whether a particular letting is business has to be
decided in the circumstances of each case. We do not think that the cases cited
lay down a test for deciding when a letting amounts to a business.
We think each case has to be looked at from a
businessman's point of view to find out whether the letting was the doing of a
business or the exploitation of his property by an owner. We do not further
think that a thing can by its very nature be a commercial asset. A commercial
asset is only an asset used in a business and nothing else, and business may be
carried on with practically all things. Therefore it is 'not possible to say
that a particular activity is business because it is concerned with an asset
with which trade is commonly carried on. We find nothing in the cases referred,
to support the proposition that certain assets are commercial assets in their
very nature.
The object of the appellant company no doubt
was to acquire land and buildings and to turn the same into account by
construction and reconstruction, decoration, furnishing and maintenance of them
and by leasing and selling the same. The activity contemplated in the aforesaid
object of the company, assuming it to be a business activity, would not by
itself turn the lease in the present case into a business deal. That would
follow from the decision of this Court in East India Housing andLand
Development Trust Ltd. v. Commissioner of Income-tax(1) where it was observed
that "the income derived by the company from shops and stalls is income
received from property and falls under the specific head. described in s. 9.
The character of that income is not altered because it is received by a company
formed with the object of developing and setting up markets." Now the
cases on which learned counsel for the appellant especially relied were cases
of the letting out of plant and machinery, in some instances along with the
factory buildings in which they had been housed. In all of them, except one,
which we will presently mention, the assessee had previously been operating the
factory or mill as a business and had only temporarily let it out as it was not
convenient for him at the time to carry on the business of running the mill or
factory. In these circumstances, it was held that by letting out the plant,
machinery and building the assessee was still conducting a business though not
the business of running the mill or factory.
In Commissioner of Income-tax v. Mangalagiri
Sri Umamaheswara Gin and Rice Factory Ltd. (2). the assessee who was the owner
of a fully equipped rice mill which it had constructed for its own trade but
had never worked it, decided to lease it out to another person. It was held
that the income was income from business. The reason given by one of the
learned Judges, Krishnan J., was, "the rent received is not only for the
use of the mill but also to cover the necessary wear and tear" and the
lease was of the mill as a working concern. Beasley J. agreed but perhaps with
a certain amount of hesitation. In the later case of Commissioner of Income-tax
v. Bosotto Brothers Limited, Madras(1) which concerned income from the letting
out of a fully equipped hotel which had previously been run by the assessee
himself as a hotel, Krishnaswami Ayyangar J. felt himself bound by the Mangalagiri
Gin and Rice factory(2) and apparently for that reason only decided to agree
with his colleagues that the case might fall under s. 10. Mockett J. thought
that what was done was to lease out an undertaking of a hotel known as a hotel
business and in that view he agreed that the case might come under s. 10.
It seems to us that Bosotto Brothers Ltd.
case(1) would have no application because it cannot possibly be said in the
case in hand that the appellant had let out any business undertaking.
Admittedly it never carried on any business of a hotel in the premises let out
or otherwise at all. Nor is there anything to show that it intended to carry on
a hotel business itself in the same building even if it had the power under its
memorandum to do so, as to which a great deal of doubt may be entertained. In
Mangalagiri Gin and Rice Factory case(2), what appears to have been really let
out was the plant and machinery and the case was decided on the basis of the
wear and tear caused to them. Furthermore, in that case it does not appear at
all to have been contended that s. 9 had any application. Whether that case was
rightly decided or not, is not a question that properly arises in this case for
none of the considerations which led to the decision arrived at there, exists
here; there is no question of any wear and tear to machinery nor of a letting
out of any working concern. Besides, the cases of Mangalagiri Gin and Rice
Factory(2) and Bosotto Brothers Limited(1), were both decided before sub-s. (4)
of s. 12 was enacted. Sub-section (4) covers a case where a building and
furniture are inseparably let out. It cannot be said what the decision in those
cases would have been if s. 12(4) was then in existence. We do not think that
it would be (1) [1940] 8 I.T.R. 41.
(2) [1927] I.L.R. 50 Mad. 529.
815 profitable to refer to the other cases
cited at the bar for they carry the matter no further.
Learned counsel for the appellant also relied
on certain clauses in the lease and a clause in the memorandum of the appellant
company to show that the lease amounted to the carrying on of a business. We
shall now turn to these provisions. Clause 3(b) of the memorandum gave power to
the appellant to manage land, buildings, and other property and to supply the
tenants and occupiers thereof refreshment, attendants, messengers, light,
waiting-room, reading room, meeting, room, libraries, laundry convenience,
electric conveniences, lifts, stables and other advantages. The contention was
that this cause in the memorandum gave the appellant a power to carry on a
business of the nature of running a hotel. We do not think, it did. But in any
case, by the lease none of the objects mentioned in this clause was sought to
be achieved. We find nothing in the lessor's covenants to some of which we were
referred to bring the matter within cl. 3(b) of the memorandum. None of these
clauses support the contention that by granting the lease, the appellant did
anything like carrying on the business of running a hotel. Thus cl. (a) is a
covenant for quiet enjoyment. Clause (b) provides for a renewal of the lease of
the demised premises being granted to the lessee for a further term of six
years at his request. Clause (c) deals with payment of municipal bills and
similar charges and ground rent. Clause (d) provides that the lessor shall
during the continuance of the lease and on its renewal provide various things
which included furniture, pillows, mattresses, gas-stoves, bottle coolers,
refrigerators, lift, electric fittings and the like and also paint the outside
of the building with oil once in five years and keep the building insured.
These are ordinary covenants in a lease of a furnished building. These do not
at all show that the lessor was rendering any service in the hotel business
carried on by the lessee or in fact doing any business at all. On the facts of
this case we are unable to agree that 816 the letting of the building amounted
to the doing of a business. The income under the lease cannot, therefore be
assessed under s. 10 of the Act as the income of a business.
The next question is about sub-s. (4) of s.
12. The relevant part of s. 12 may now be set out.
S. 12. (1) The tax shall be payable by an
assessee under the head 'Income from other sources' in respect of income,
profits and gains of every kind which may be included in his total income if
not included under any of the preceding heads.
x x x x x (3) Where an assessee lets on hire
machinery plant or furniture belonging to him, he shall be entitled to
allowances in accordance with the provisions of clauses (iv), (v), (vi) and
(vii) of sub-section (2) of section 10.
(4) Where an assessee lets on hire machinery
plant or furniture belonging to him and also buildings, and the letting of the
buildings is inseparable from the letting of the said machinery, plant or
furniture, he shall be entitled to allowances in accordance with the provisions
of the clauses (iv), (v), (vi) and (vii) of sub-section (2) of section 10 in
respect of such buildings.
To clear the ground it may be stated here
that once s. 10 is found inapplicable to the case, there is no dispute that the
income from the hire of the furniture and fixtures was rightly assessed under
s. 12 after providing for the allowances mentioned in sub-s. (3) of that
section. The only dispute that then remains is whether, the building is to be
assessed under s. 9 which of course will have to be on the basis of its annual
value or whether the rent from the building has to be assessed under s. 12
after the allowances mentioned in sub-s. (4) have been deducted.
We have earlier said that s. 12 can only
apply if no other section is applicable, because it deals 817 with the
residuary head of income. Now sub-s. (4) of s. 12 only deals with certain
allowances and it obviously proceeds on the basis that the income mentioned in
it, namely, that from the buildings when inseparably let with plant, machinery
or furniture is not income falling under any of the specific heads dealt with
by ss. 7 to 11 and is, therefore, income falling under the residuary head contained
in s. 12. There a preliminary difficulty arises. In respect of buildings-and
with them alone sub-s. (4) of s. 12 is concerned-as already seen, the owner is
liable to tax under s. 9 not on the actual income received from it but on its
annual value and in fact quite irrespective of whether he has let it out or
not. How then can it be said that the rent received from a building could at
all come under s. 12? In other words, why can it not be said that the specific
section, that is, s. 9, covers the case and the income from the building cannot
be assessed under s. 12 and no question of giving any allowances under s. 12
(4) arises? It has sometimes been suggested as a solution for this difficulty
that sub-s. (4) of s. 12 applies only when the building is let out by a person
who is not the owner because such a case would not come under s. 9. Counsel for
neither party however was prepared to accept that suggestion. Indeed that
suggestion has its own difficulty. Under sub-s. (4) of s. 12 the assessee
becomes entitled among others to an allowance in accordance with s. 10(2)(vi)
which is on account of depreciation of the building "being the property of
the assessee" from which it follows that sub-s. (4) of s. 12 contemplates
the letting of the building by the owner. Subsection (4) of s. 12 must,
therefore, be applicable when machinery, plant or furniture are inseparably let
along with the building by the owner. If sub-s. (4) of s. 12 is to have any
effect-and it is the duty of the court so to construe every part of a statute
that it has effect-it must be held that the income arising from the letting of
a building in the circumstances mentioned in it is an income coming within the
residuary head. If a person cannot be assessed under s. 12 in respect of the
rent 1/SCI/64-52 818 of a building owned by him, sub-s. (4) will become
redundant; there will be no case in which the allowances mentioned by it can be
granted in computing the actual income from a building. An interpretation
producing such a result is not natural. We :must, therefore, hold that when a
building and plant, machinery or furniture are inseparably let the Act
contemplates the rent from the building as a residuary head of income.
The next question is, does the present
letting come within the term of sub-s. (4) of s. 12 ? That provision requires
two conditions, namely, that the furniture should be let and also buildings and
the letting of the buildings should be inseparable from the letting of the
furniture. Now here both furniture and building have no doubt been let. The
question is, are they inseparably let? The High Court does not appear to have
answered this question for it was of the view that not only must the two be
inseparably let out but also that "the primary letting must be of the
machinery, plant or furniture and that together with such letting or along with
such letting, there is a letting of buildings".
The High Court held that the primary letting
in the present case was of the building and, therefore, deprived the appellant
of the benefit of s. 12 (4). We may state here that the Tribunal had thought
that by requiring that the letting of one should be inseparable from the
letting of the other, the section really meant that the primary letting was of
the machinery and the letting of the building was only incidental to the
letting of the machinery. It also held that in the present case the primary
letting was of the building.
Now the difficulty that we feel in accepting
the view which appealed to the High Court and the Tribunal is that we find
nothing in the language of sub-s. (4) of s. 12 to support it. No doubt the
sub-section first mentions the letting of the machinery, plant or furniture and
then refers to the letting of the building land further uses the word 'also' in
connection with 819 the letting of the building. We, however, think that this
is too slender a foundation for the conclusion that the intention was that the
primary letting must be of the machinery, plant or furniture’s. In the absence
of a much stronger indication in the language used, there is no warrant for
saying that the sub-section contemplated that the letting of the building had
to be incidental to the letting of the plant, machinery or furniture. It is
pertinent to ask that if the intention was that the letting of the plant,
machinery or furniture should be primary, why did not the section say so?
Furthermore, we find it practically impossible to imagine how the letting of a
building could be incidental to the letting of furniture, though we can see
that the letting of a factory building may be incidental to the letting of the
machinery or plant in it for the object there may be really to work the
machinery.
If we are right in our view, as we think we
are, that the letting of a building can never be incidental to the letting of
furniture contained in it, then it must be held that no consideration of
primary or secondary lettings arises in construing the section for what must
apply when furniture is let and also buildings must equally apply when plant
and machinery are let and also buildings. We think all that sub-s. (4) of s. 12
contemplates is that the letting of machinery, plant or furniture should be
inseparable from the letting of the buildings.
What, then, is inseparable letting? It was
suggested on behalf of the respondent Commissioner that the sub-section
contemplates a case where the machinery, plant or furniture are by their nature
inseparable from a building so that if the machinery, plant or furniture are
let, the building has also necessarily to be let along with it. There are two
objections to this argument. In the first place, if this was the intention, the
section might well have provided that where machinery, plant or furniture are
inseparable from a building and both are let etc. etc. The language however is
not that the two must be 820 inseparably connected when let but that the
letting of one is to be inseparable from the letting of the other. The next
objection is that there can be no case in which one cannot be separated from
the other. In every case that we can conceive of, it may be possible to
dismantle the machinery or plant or fixtures from where it was implanted or
fixed and set it up in a new building. As regards furniture, of course, they
simply rest on the floor of the building it,. which it lies and the two indeed
are always separable. are unable, therefore, to accept the contention that
inseparable in the sub-section means that the plant, machinery or furniture are
affixed to a building.
It seems to us that the inseparability
referred to in sub-s. (4) is an inseparability arising from the intention of
the parties. That intention may be ascertained by framing the following
questions: Was it the intention in making the lease-and it matters not whether
there is one lease or two, that is, separate leases in respect of the furniture
and the building-that the two should be enjoyed together? Was it the intention
to make the letting of the two practically one letting? Would one have been let
alone a lease of it accepted without the other? If the answers to the first two
questions are in the affirmative, and the last in the negative then, in our
view, it has to be held that it was intended that the lettings would be
inseparable. This view also provides a justification for taking the case of the
income from the lease of a building out of s. 9 and putting it under s. 12 as a
residuary head of income It then becomes a new kind of income, not covered by
s. 9, that is, income not from the ownership of the building alone but an
income which though arising from a building would not have arisen if the plant,
machinery and furniture had not also been let along with it.
That takes us to the question, was the
letting in the present case of the building and the furniture and fixtures
inseparable in the sense contemplated in the sub-section as we have found that
sense to be ? 821 It is true that the rent for the building and the hire for
the furniture were separately reserved in the lease but that does not, in our
view, make the two lettings separable. We may point out that the Tribunal has
taken the same view and the High Court has not dissented from it. In spite of
the sums payable for the enjoyment of two things being fixed separately, the
intention may still be that the, two shall be enjoyed together. We will now refer
to the provisions in the lease to see whether the parties intended that the
furniture, fixtures and the building shall all be enjoyed together. Clause 1 of
the lessee's covenant, in our opinion, puts the matter beyond doubt and it is
as follows:
1. (a) To use the demised premises and the
said furniture and fixtures for the purpose of running hotel, boarding and
lodging house, restaurant, confectionary and such other ancillary businesses as
are usually or otherwise can be conveniently carried on with the said business
in the said premises such as providing show-cases show windows, newspaper
stall, dancing and other exhibition of arts, meeting rooms etc., and not for
any other purpose without the previous permission in writing of the Lessors.
It is clear from this clause that the
building and the fixtures and furniture were to be used for one purpose,
namely, for the purpose of running a hotel with them all together. Again cl.
1(h) of the lessee's covenant provided that the lessee is not to remove any article
or thing from the premises except for the purposes of and in the course of the
hotel business which latter would be for effecting repairs to them or for
replacing them where it was the duty of the lessee to do so under the lease. We
think, therefore, that the lease clearly establishes that it was the intention
of the parties to it that the furniture and fixture and the building should be
enjoyed all together and not one separately from the other.
Before we conclude we think we should refer
to two other covenants. First, there is a lessor's 822 covenant No. 11 (b) to
renew the lease of the demised premises which term, it may be conceded, means
the building only, for a further term of six years. This clause says nothing
about the renewal of any lease in respect of furniture or fixtures. Likewise,
cl. III(2) provides that if the demised premises, that is to say,the building,
be destroyed or damaged by fire it shall be the option of the lessee to
determine the lease and in any event the rent shall be suspended until the
premises shall again be rendered fit for occupation and use. Here also there is
no mention of the furniture. It was said on behalf of the respondent that these
two clauses indicate that the building and the furniture were being treated separately
and therefore the lettings of them were not inseparable. We are unable to
accept this contention. As regards renewal of the lease of the building, there
is cl. (II)d making substantially a similar provision in respect of the
furniture and fixtures. it requires the lessor to provide at all times during
the continuance of the lease and the renewal thereof, the furniture and
fixtures mentioned in the lease. Therefore, though the renewal clause in cl.
11(b) does not mention the lease of furniture or fixtures being renewed, cl.
II(d) makes it incumbent on the lessor to supply and maintain them during the
renewed term of the lease of the building. Clause II(d) would also cover a case
where by fire the furniture was destroyed. In such a case the lessee could
under that clause require the lessor to provide and if necessary to replace,
the destroyed furniture. To the same effect is cl. 1(e) which says that the
major repair to or replacement of the furniture, shall be made by the lessor.
Such repair or replacement may, of course, be necessitated in a case where the
furniture or fixtures are damaged by fire. We, therefore, think that the
clauses in the lease on which the respondent relies do not indicate that the
letting of the building was separable from the letting of the furniture and
fixtures. We think that the lease satisfies all the conditions for the
applicability of s. 12(4) and is covered by it.
823 In the result we answer the question
framed thus: The rent from the building will be computed separately from the
income from the furniture and fixtures and in the case of rent from the
building the appellant will be entitled to the allowances mentioned in sub-sec.
(4) of s. 12 and in the case of income from the furniture and fixtures, to
those mentioned in sub-s (3), and that no part of the income can be assessed
under s. 9 or under s. 10. The judgment of the High Court is set aside. The
appellant will be entitled to the costs here and below.
Appeal allowed.
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