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PETITIONER: SULTAN BROTHERS (P) LTD.

       Vs.

RESPONDENT: COMMISSIONER OF INCOME-TAX

DATE OF JUDGMENT: 06/12/1963

BENCH: SARKAR, A.K. BENCH: 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.

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  East Indian Housing & Land Development Trust Ltd. v. Com- missioner 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.

JUDGMENT:   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,  therfore,  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 sub- 810

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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  sub- section  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.

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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 reconstruc- 813 tion, 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 and-  Land 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

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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 hesita- (1)  [1961] 42 I.T.R. 49.   (2) [1927] I.L.R. 50 Mad. 529. 814 tion.   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

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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

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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  allow- ance 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.  Sub- section  (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

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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 furnitures.  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

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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,

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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  there- fore  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.