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PETITIONER: COMMISSIONER OF INCOME TAX,

       Vs.

RESPONDENT: VIKRAM COTTON MILLS LTD.

DATE OF JUDGMENT15/12/1987

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR  460            1988 SCR  (2) 389  1988 SCC  Supl.  442     1987 SCALE  (2)1403

ACT:      Whether the  income of  the assessee company which lets out its  assets temporarily is liable to tax as "profits and gains of  business" or  "Income from other sources"-Sections 10 and 12 of the Income Tax A rt

HEADNOTE: %      The  respondent,   the  assessee  company,  carried  on business of manufacture of textiles. From the year 1949, the respondent started  running into  losses, resulting  in  the stoppage of  its manufacturing activity from December, 1953. In May,  1956, one  of the  creditors of the company filed a winding up petition in the High Court. One major creditor of the respondent  company, in  exercise of its powers under an English mortgage  of the  fixed assets  of the  company took actual possession  of the  immovable properties hypothecated to the  creditor. The  High Court,  with the approval of the assessee  company   and  its  creditors,  evolved  a  scheme whereunder the  business assets  of the company were let out on a  rent of  Rs.2,50,000 per  year. The  lease was for ten years with  option of  renewal for  another ten  years.  The intention was  that the  various creditors would be paid out of the  lease money. The lease money realised by the company for the  assessment years 1957-58 to 1959-60 was assessed by the Income Tax Department under section 10 of the Income Tax Act under  the head  "Profits and gains of business". But in the subsequent assessment years, the Income Tax officer held that income  from the  lease rent  was liable to be assessed under the  head "Income from other sources" under section 12 of the Act. The assessee company filed an appeal against the order of the Income Tax officer. The Commissioner upheld the order of  the Income  Tax officer.  The  assessee  took  the matter to the Income Tax Tribunal. The Tribunal directed the Income Tax  officer to  treat the  income arising out of the letting out  of the  assets as ’business income’. The matter then went  to the  High Court.  The High Court held that the income derived  by the  assessee company by way of the lease rent from  the letting  out of  the assets  during the years ending  31st  December,  1959,  31st  December,  1960,  31st December, 1961 and 31st December, 1962, is assessible to tax under the head "profits and gains of business". Aggrieved by

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the decision of the High Court, the revenue appealed to this Court. 390      Dismissing the  appeal (as also the connected petitions for special leave), the Court, ^      HELD: Whether  a  particular  income  received  by  the assessee as  a result  of the  activities carried  on by the assessee is  business income  or rental  income depends upon the  manner  of  the  exploitation  of  the  assets  of  the assessee. It only varies from the facts and circumstances of each case. In each case, the intention has to be gathered as to whether the commercial asset was intended to be exploited by the  assessee or  whether it  was intended  to be used by letting it  out for  a temporary  period. From the facts and circumstances of the case, it appears that it was a possible conclusion that the assessee intended that there should be a temporary suspension  of the business for the purpose of re- construction of  the company and for that matter, there must be stopping of the user of the machinery by the assessee. It was a  temporary lease though for 10 or 19 years on renewal, and after  the expiry  of the  period, the property reverted back to  the assessee.  It is  pre-dominantly  a  matter  of intention, which  is an  inference  to  be  drawn  from  the relevant facts.  All the  relevant facts,  it appears,  have been considered  by the  Tribunal from  the  correct  stand- point. The Tribunal found that the intention was not to part with the  machine but to lease it out for a temporary period as a  part of exploitation. In such circumstances, it cannot be said  that no  business was  carried on  and  the  income derived from the machine letting out was only a rent income, and in the facts and circumstances of the case, it cannot be said that  such a  finding was  perverse or not sustainable. The High Court was right in the view it took. [398F; 399E-H; 400A-B]      Commissioner of Excess Profits Tax, Bombay City v. Shri Lakshmi Silk  Mills Ltd., 20 ITR 451; Commissioner of Income Tax, West Bengal v. Calcutta National Bank Ltd., 37 ITR 171; Narain Swadeshi  Weaving Mills  v.  Commissioner  of  excess Profits Tax,  26 ITR  765; Inland  Revenue  Commissioner  v. Broadway car  Ltd, [1946]  2 AER 609; Commissioner of Income Tax v.  Shaw Wallace  & Co., [1932] ILR 59 Cal. 1343 and New Savan Sugar  and Gur  refining Co.  Ltd. v.  Commissioner of Income Tax, Calcutta, 74 ITR 7, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No. 689692 (NT) of 1975.      From the  Judgment and  order  dated  8.5.1973  of  the Allahabad High  Court in  Income Tax  Reference No.  453  of 1971. 391      Miss A. Subhashini for the Appellant.      D.D. Gupta for the Respondent.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J. These appeals by special leave arise from  the judgment  and order  of the  Allahabad  High Court  at  the  instance  of  the  revenue.  The  Income-tax Appellate Tribunal,  Bombay Bench,  referred  the  following question of law for the opinion of the Allahabad High Court: (The question  related to  the assessment  years  1960-6  1, 1961-62, 1962-63 and 1963-64).           "Whether, on the facts and in the circumstances of

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         the case,  the  income  derived  by  the  assessee           company by  way of lease rent from the letting out           of its  assets during  the years  ended  31.12.59,           31.12.60, 31.12.61  and 31.12.62  is assessable to           tax under the head ’Profits and gains of business’           or under the head ’Income from other sources’?"      The assessee  company was a limited company. It carried on the  business of  manufacture of textiles. From 1949, the assessee company  started running into losses. At the end of December, 1953, the position was that as against the capital of Rs.11,00,000  the accumulated liabilities of the assessee company  amounted  to  Rs.26,00,000.  Because  of  this  the assessee company  stopped its  manufacturing  activity  from December, 1953.  This state of affair continued till 21.5.56 when   one  of   the  creditors   of  the  company  filed  a winding up  petition  in  the  High  Court.  M/s  Industrial Finance Corporation,  who was  one of the major creditors of the company,  had in exercise of its powers under an English mortgage of  the fixed  assets of  the company  taken actual physical possession of the immovable properties hypothecated to them. Under Section 153 of the Indian Companies Act 1913, the High Court with the approval of the assessee company and the creditors  evolved  a  scheme  whereunder  the  business assets of  the assessee  company were let out to M/s General Fibres Dealers (Pvt.) Ltd., Calcutta on Rs.2,50,000 per year rent. The  lease was for ten years with an option of renewal for another  ten years. The intention, it was contended, was that the  various creditors  would be  paid out of the lease money.  The   management  of   the  assessee   company   was transferred to  a Board  of Trustees  appointed by  the High Court. The  lease money realised by the assessee company for assessment years  1957-58 to  195960  was  assessed  by  the Department under Section 10 of the Indian 392 Income-Tax  Act   under  the  head  ’Profits  and  gains  of business’. But in subsequent assessment years the Income-Tax officer held  that the income from the lease rent was liable to be  taxed under.  the head  ’income from  other  sources’ under section  12 of  the Act. The assessee company took the matter up  in appeal.  It was  urged before the Commissioner that the  assets of the company were exploited and there was no intention  of the  assessee to  discontinue the  business activities. The  assets of  the company,  were  let  to  the lessee with  the principal  object of liquidating a colossal liability and  extricating itself from financial crises. The Commissioner, however,  upheld the finding of the Income Tax officer. The  assessee company  then took  the matter to the tribunal The Tribunal found:      1. There  was nothing  on record  to indicate  that the         assessee company was formed to let out its plant and         machinery on hire      2. On account of financial crisis, the assessee company         found it advantageous to let out the machinery for a         temporary period of ten years to the lessee.      3. The assessee company was able to liquidate its         liabilities at the end of such period and regain the         physical possession of it assets.      4. The assessee company was able to persuade its         creditors not to make any distress sale of the         machinery taken over by the Industrial Finance          Corporation with a view to salvage the company from         its total extinguishment.      5. At the end of the lease period, the assessee company         did not dismantle the assets and did not sell away         or otherwise dispose of the assets.

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    It appears  that the  maintenance of  the assets by the company meant  that the  company had  intention  to  restart manufacturing of  textiles. The  Tribunal inferred  that the intention of  the company  in letting  out its assets was to exploit  the  commercial  assets  for  the  purpose  of  its business. The  Income-Tax officer  was directed to treat the income arising  out of  the letting  out of  the  assets  as business income.      The High Court noted in the Judgment under appeal which inci- 393 dentally is reported in ITR Vol. 106 (1977) at page 829 that the assessee’s  case was that the income received by it from the lease of the plant and machinery was business income and was liable to be adjusted against the unabsorbed loss of the preceding year.  It is  here that the question arises. If it was  business   income  then  the  unabsorbed  loss  of  the preceding year  could be adjusted against such income. If on the other  hand it  was not,  then such  income could not be adjusted against  the loss  of the previous year. The rub of the matter lies there.      It is  well-known that Section 24 of the Indian Income- Tax Act,  1922, deals  with set  off and  carry  forward  of losses. Under  Sub, section (IJ where an assessee sustains a loss of  profits or  gains in any year under any of the head mentioned in  Section 6,  he shall  be entitled  to have the amount of  the loss  set off  against his  income profits or gains under  any other  head in  that year.  Sub-section (2) provides that where an assessee suffers loss in any business and the loss cannot be wholly set off under sub-section (1), the  unabsorbed   loss  shall  be  carried  forward  to  the succeeding year and shall be set off against the income from the same  business. Before the loss could be carried forward it was  necessary that the income against which the loss has to be  set off  should be income from any business (emphasis supplied).      It was submitted before the High Court on behalf of the assessee that  the plant  and machinery  of the factory were commercial assets  and any  income from  the letting  out of such an  asset would  be the  business income.  In  support, reliance was  placed upon  several decisions  of this Court. One among  them is  the decision in the case of Commissioner of Excess  Profits Tax,  Bombay City  v. Shri  Lakshmi  Silk Mills Ltd.,  20 I.T.R.  45 1.  This Court in Commissioner of Income-tax West  Bengal v.  Calcutta National  Bank Ltd., 37 I.T.R. 171  dealing with  excess profit  tax case, explained that. the  concept of  profit and  business was little wider under Excess  Profits Tax Act of 1940. The High Court relied on the  several decisions,  namely, the decision in the case of Commissioner  of Excess  Profits Tax, Bombay City v. Shri Lakshmi Silk Mills Ltd., (supra) and Narain Swadeshi Weaving Mills v.  Commissioner of Excess Profits Tax, 26 ITR 765. In view of  the above  decisions, the  High Court held that the income derived  by the assessee company by way of lease rent from the  letting out  of its  assets during the years ended 31st December,  1959, 31st  December, 1960,  31st  December, 1961 and 31st December, 1962. is assessable to tax under the head profits and gains of business.      Being aggrieved  by the  aforesaid decision revenue has come up 394 in appeal  before this  Court by  Leave under Article 136 of the Constitution.  Whether a  particular income  received by the assessee  as a  result of  activities carried  on by the assessee is  business income  or rental  income depends upon

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the  manner  of  the  exploitation  of  the  assets  of  the assessee. It  only varies  from facts  and circumstances  of each case.      This question  was discussed in detail by this Court in Commissioner of  Excess Profits  Tax, Bombay  City  v.  Shri lakshmi Silk  Mills Ltd.,  (supra}) where  this Court  found that if  a commercial asset was not capable of being used as such, then  its being let out to others did not result in an income which was the income of the business but it could not be said  that an  asset which  was acquired and used for the purpose of  the business  ceased to be a commercial asset of that business  as soon  as it was temporarily put out of use or let  out to  another person  for use  in his  business or trade. The  yield of  income by  a commercial  asset was the profit of  the business  irrespective of the manner in which that asset  was exploited  by the  owner of the business. He was entitled  to exploit  it to  the best  advantage and  he might do  so either  by using  it himself  personally or  by letting it  out to  somebody else. The view that in order to constitute business  income the commercial asset must at the time it  was let  out be  in  a  condition  to  be  used  as commercial asset by the assessee himself was not correct. In that case  the assessee  company was  a manufacturer of silk cloth and as a part of its business it installed a plant for dyeing silk  yarn. During  the chargeable accounting period, Ist January, 1943 to 31st December, 1943 owing to difficulty in obtaining  silk yarn  on account  of the war it could not make use  of this  plant and it remained idle for some time. In August  7 1943,  it was  let out to a person on a monthly rent. The  question was  whether such  sum representing  the rent for five months realised by the assessee was chargeable to excess  profits tax  as profits of business or was income from   other sources  and was  therefore not  chargeable  to excess profits  tax. It was held by this Court that it was a part of  the normal activities of the assessee’s business to earn  money  by  making  use  of  its  machinery  by  either employing in  its own  manufacturing concern  or temporarily letting it  to others  for making  profit for  that business when for  the time being it could not itself run it and that the dyeing  plant had not ceased to be a commercial asset of the business  and the  sum representing  the rent  for  five months  received   from  the  lessee  by  the  assessee  was therefore income  from business and was chargeable to excess profits tax.  As mentioned  hereinbefore, the question arose in the  context of  Excess Profit  Tax Act;  the consequence will be  the same  in the case of Income-Tax Act. This Court observed again  that the  yield of  income   by a commercial asset irrespective of the manner in which the assets                              VINEET 395 are exploited  by the  owner of the business would be income from business.  It was  emphasised  that  the  assessee  was entitled to exploit it to the best advantage and he might do so either  by using  it himself  personally or by letting it out to  somebody else.  This  Court  gave  an  example.  For instance, in  a manufacturing  concern use  of its plant and machinery could  advantageously be made owing to the paucity of raw materials only for six hours in a working day, and in order to  get the  best yield  out of it, another person who has got  the requisite raw materials is allowed to use it as a licensee  on payment  of certain  consideration for  three hours. The  question was  posed: could  it be said in such a situation with  any justification  that the  amount realised from the  licensee was  not a part of the business income of the licensor.  The Court noted that in that case the company

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was incorporated  purely as a manufacturing concern with the object  of   making  profit.  It  had  installed  plant  and machinery for the purpose of its business and it was part of it, if  at any time it found that any part of its plant "for the time  being" could  not be  advantageously employed  for earning profit  by the  company itself,  to earn  profit  by leasing it to somebody else. In such circumstances, it would be improper  to refuse  it to  treat it  as such  being  the advantage  of   business  income.   This  Court   noted  the observations of  the  Court  of  Appeal  in  Inland  Revenue Commissioner v.  Broadway Car  Co Ltd., [1946] 2 A R 609. In that case  the company  had carried on the business of motor car agents  and repairers on land held on lease from 1935 to 1956 at  an annual  rent of  750.  By  1940  the  company’s business had dwindled under war conditions to such an extent that no  more than  one third  of the  land was required. In those circumstances  the remainder  was sublet  for fourteen years at  an annual rent of  1150. The General Commissioner of Income  Tax decided  that the  difference of 1400 between the outgoing  of 1750 for the land retained and the incoming of  1150 for the land disposed of was "income received from an investment",  and  business  not  being  one  within  the special categories  mentioned in  the Finance  Act 1939 that 1400 was  not taxable.  Lord Scott,  J. held  that the  word ’investment’ must be construed in the ordinary popular sense of the word as used by business men and not as a term of art to say  that the Commissioners had erred in law in coming to the  conclusion   that  the   transaction  resulted   in  an investment. Lord  Scott, J.  emphasised on  the  point  that after  the   business  of   the  company  had  dwindled,  it partitioned part  of the land from the rest and sublet it by installing a  heating apparatus  for the  sublessee. It  was found that war-conditions had reduced the company’s business to very  small proportions  and they cut their LOSS by going out of  business in  respect of the major part of their land and put  it out  of their power for fourteen years to resume business there. In such a 396 situation, it  could not  be business  any more.  That was a peculiar circumstance when the assessee had a desire to part with that  type of business. Therefore, whether a particular income is  from business  or from investment must be decided according to  the general commonsense view of those who deal with those  matters  in  the  particular  circumstances  and conduct of the parties concerned. Has the assessee evidenced any intention  to switch over from exploitation of assets by itself and used the asset as a rented one?      This Court  in the aforesaid decision found that it was a part  of the  normal activities of the assessee’s business to earn  money by  making use  of his  machinery  by  either employing it in his own manufacturing concern or temporarily letting it  to others  for making  profit for  that business when for the time being it could not itself run it. The High Court in  that case was in error, therefore, in holding that the dyeing  plant had ceased to be a commercial asset of the assessee and  the income  earned by it and received from M/s Parakh & Co was chargeable to excess profits tax.      This Court  had again occasion to examine this question in Narain  Swadeshi Weaving  Mills v. Commissioner of Excess Profits Tax,  26 ITR  765. That  was  a  case  under  Excess Profits Tax  Act, 1940.  It was  observed by this Court that before the  Excess Profits  Tax officer could embark upon an enquiry as  to whether  a transaction  was effected  for the avoidance or  reduction of  liability to  excess profits tax within the  meaning of Section 10A of the Excess Profits Tax

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Act, 1940  and to  make such  adjustments as  he  considered appropriate under  that section there must be proof that the assessee  was,  during  the  chargeable  accounting  period, carrying on business of kind referred to in Section 5 of the Act. There the assessee firm was carrying on a manufacturing business consisting  of three partners, N and his two sons R and  G.   In  April   1940  a  public  limited  company  was incorporated with  the object  of taking  over the  business from the  assessee firm. The Company was director-controlled and the  directors were  N, his  three sons  R, and  S and a brother-in-law  of   G.  the   company  purchased  only  the buildings and  leasehold rights  from the  assessee firm but took over  from it  on lease at an annual rent the plant and machinery. The  assessee firm did not thereafter manufacture anything and  it  had  accordingly  no  further  trading  or commercial activity.  In July,  1940 the  company executed a managing agency agreement in favour of U & Co. consisting of R and  as partners.  In January, 1941, the company appointed as its  selling agent  R &  Co. consisting  of R,  and S  as partners. In  April, 1941, the shares of the partners in the assessee firm were adjusted so as to 397 equalise, as far as possible, the share of N with the shares which his sons got in the several firms. All the three firms were registered  under Section  26A of the Indian Income-Tax Act, 1922.  The question  was whether the Excess Profits Tax Authorities were justified in amalgamating the income of U & Co. and  R &  Co. with the income of the assessee firm under the provisions of Section 10A of the Excess Profits Tax Act, 1940. It was held that in the facts and circumstances of the case the  letting out  of the  plant and  machinery  by  the assessee firm  to the  company could  not be  held  to  fall within the  body  of  the  definition  of  "Business"  under section 2(5)  and as  the assessee  firm had,  therefore, no business  during  the  relevant  period  to  which  the  Act applied, Section  10a could  not be  invoked by  the  Excess Profits Tax  Authorities.  It  was  further  held  that  the application of  Section 10a  with a view to amalgamating the income of  the firms  of U & Co. and R & Co. with the income of the assessee firm was not valid in law.      Dealing with  this  question,  this  Court  noted  that "business" as  defined under  Section  2(5)  of  the  Excess Profits Tax Act included amongst others, any trade, commerce or manufacture  or any  adventure in  the nature  of  trade, commerce or  manufacture. The  first part of this definition of a "business" in the Excess Profits Tax Act is the same as the definition  of a  business in Section 2(4) of the Indian Income-Tax Act, 1922. Whether a particular activity amounted to any  trade, commerce  or manufacture  or any adventure in the nature  of trade,  commerce or  manufacture is  always a difficult question  to answer.  The Judicial Committee noted in the  case of Commissioner of Income-tax v. Shaw Wallace & Co., [1932]  I.L.R. 59  Cal. 1343 that the words used in the definition are  no doubt wide but underlying each of them is the fundamental  idea  of  the  continuous  exercise  of  an activity, (emphasis  supplied). It  was also  emphasised  by this Court  that the  word "business"  indicated some  real, substantial and  systematic or  organised course of activity or conduct  with a  set purpose.  In that  case, this  Court pointed out  the difference  between Excess  Profits Tax Act and the  Indian Income-Tax Act, 1922. So far as the question before us is concerned, this difference is not material.      Shri Manchanda,  learned counsel  for the  revenue draw our attention  to Commissioner of Income-tax, West Bengal v. Calcutta National  Bank Ltd.,  37  I.T.R.  171.  This  Court

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reiterated that  the term "business" is a word of very wide, though by  no means  determinate, scope. There the assessee, which was  a banking  company in  a large  way of  business, owned  a  six-storeyed  building,  where  its  offices  were located on  the ground  floor and a part of the sixth floor, while the rest 398 of the  building was  let out  to tenants.  The question was whether the  income realised  by the assessee by way of rent for the portion of the building let out was liable to excess profits tax  and could  be included  in the  profits of  the business under rule 4(4) of the First Schedule to the Excess Profits Tax  Act, 1940.  It was held that the realisation of rental income  by the  assessee was  in the  course  of  its business in  prosecution  of  one  of  its  objects  in  the memorandum. It  depends in  the facts  and circumstances  of each case.      In New  Savan  Sugar  and  Gur  Refining  Co.  Ltd.  v. Commissioner of  Income Tax,  Calcutta, 74  I.T.R.  7,  this Court was  dealing with  a case, where the appellant-company was carrying  on the  business of crushing sugarcane and gur refining. Its  managing agents  wrote a  letter addressed to its shareholders  referring  to  the  alarming  increase  of Government  interference   in  the  affairs  of  this  sugar industry in  Bihar and the increase of wages of the workers, the levy  of a   cess  and deterioration  in cane  crops and advising the  acceptance of  an offer  of the  lease of  the company as a running concern. Thereafter examination, it was found that the cumulative effect of different clauses of the deed suggested  that the assessee would have no concern with the production  of the  company. It  was therefore held that the terms  of the  lease deed  that  the  intention  of  the appellant was  to part  with the  entire  machinery  of  the factory and the premises with the obvious purpose of earning rental income and not to treat the factory and the machinery as a commercial asset during the subsistence of the lease.       In  each case  the intention  has to be gathered as to whether the commercial asset was intended to be exploited by the assessee  or whether  it was  intended  to  be  used  by letting it  out for  a temporary period. It depends upon the facts and  circumstances of  each case. The circumstances of the instance  case were  as  follows  as  appears  from  the statement of the case:           "The  assessee-company   incurred  losses  in  its           business of  manufacture of textiles from the year           1949.   On    account   of   heavy   losses,   its           manufacturing   activities   were   stopped   from           December,  1953.   By  1956,   colossal  loss  had           accumulated. Its liabilities had amounted to Rs.26           lakhs as  against the  capital of  Rs.11 lakhs.  A           winding-up petition  was filed  in  the  Allahabad           High Court  by the  creditors. M/s.  Jawala Prasad           Radha Krishan  in February  1954.  The  Industrial           Finance Corporation  was one  of the  creditors of           the company  and the  company had  a liability  of           Rs.12.5 lakhs to 399           that undertaking  secured by  the fixed  assets in           terms of  a mortgage  deed dated  19.12.1950.  The           Punjab National Bank had advanced a loan of Rs.6.5           lakhs to  the company  by movable  assets  of  the           company  such  as  cotton,  cloth  and  yarn.  The           Industrial Finance  Corporation had taken physical           possession of  the  immovable  properties  of  the           company on  12th  July,  1954,  on  the  company’s

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         failure to  pay off  its debts  to the  I.F.C. The           High Court  thereafter approved  a scheme,  by  an           order dated  21.5.1956 whereby  the assets and the           entire business  of the  assessee-company were let           out to  M/s. General  Fibres Dealers  (Pvt.) Ltd.,           Calcutta, at a least rent of Rs.2,50,000 per year.           The  management   of  the   assessee  company  was           transferred to  a Board  of Trustees  appointed by           the High  Court pursuant to the scheme referred to           above. According  to the  terms of the lease dated           7.7.1956  with  the  lessee,  the  General  Fibres           Dealers (Pvt.)  Ltd., the  assets of  the  company           were let  out for  an initial period of ten years,           with a  right given  to the lessee to exercise the           option for  a further  period of  ten  years.  The           assesse-company had  maintained a  skeleton  staff           thereafter."      In the context of these facts, it appears that it was a possible conclusion  that the  assessee intended  that there should be  a temporary  suspension of  the business  for the purpose of reconstruction of the company and for that matter there must  be stoppage  of the user of the machinery by the assessee. It  was temporary  lease though for 10 or 19 years on renewal  years and  after the  expiry of  the period  the property reverted back to the assessee.      It is  pre-dominantly a  matter of intention. Intention is an inference to be drawn from the relevant facts. All the relevant facts,  it appears  have  been  considered  by  the Tribunal from  the correct standpoint, i.e. Ordinary prudent businessman or  as in  England it used to be "man on the top of the  platform omnibus.", or "director’s arm chair". If on that test a plausible conclusion has been drawn-no objection can be taken.      On  that  basis  applying  the  correct  principle  the Tribunal found  that the  intention was not to part with the machine but to lease it out for a temporary period as a part of exploitation.  In such  a circumstance, it cannot be said that no  business was  carried on  and their  income derived from the machine letting was only a rent income. There 400 was a  temporary suspension  of  business  for  a  temporary period for  an object  to tide  over the  crisis  condition. There was  never any  act indicating that the assessee never intended to carry on the business.      In the  background of these principles and in the facts and circumstances of the case so found, we cannot say such a finding was either perverse or not sustainable.      In the aforesaid view of the matter, the High Court was right in  the view  it took and the appeals must accordingly fail and are dismissed with costs.      In the  view we  have taken  in the  first matter,  the special leave  petitions Nos. 5324 and 5325 of 1978 are also dismissed. But there will be no order as to costs. S L                          Appeals & Petitions dismissed. 401