Ashok Bhan, J.
The Commissioner, Jalandhar, has filed this petition under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as `the Act') for issuing a mandamus directing the Tribunal, Amritsar Bench, to refer the following question of law to this court for its opinion :
'Whether, on the facts and in the circumstances of the case, the learned Tribunal is right in law in confirming the order of the Deputy Commissioner (Appeals) who treated the rental income of the assessee as business income and consequently deleted the disallowance made at Rs. 71,245 on account of salary paid to partners under section 40(b) of the Income Tax Act, 1961 ?'
2. The assessee is a registered firm deriving income from manufacturing and repair of gears used in Rubber Factories & Floor Mills. During the course of assessment proceedings, it was found that the assessee had shifted its factory building from Adda Bastian to Basti Bawa Khel, Jalandhar. The building situated at Adda Bastian was given on rent and the rental income received was Rs. 1,06,525. The assessee showed this income under the head `Income from business or profession' whereas the assessing officer held that it was income from house property. The assessing officer, accordingly, did not consider the rental income for the purpose of salary paid to partners under section 40(b) of the Act and disallowed the claim of salary made at Rs. 71,245. He also disallowed depreciation of Rs. 9,851 claimed in respect of let out property.
3. The assessee carried an appeal before the Deputy Commissioner (Appeals), Jalandhar. The appeal was accepted and the order of the assessing officer was set aside. It was held that rental income was to be assessed under the head `Income from business or profession'. The assessee was originally carrying on business in the building situated at the Adda Bastian from where it was shifted to a new place due to commercial expediency and business exignecies and the old premises were leased out with a motive to reduce the burden of expenditure and to reduce the loss. The old premises were being used by the assessee commercially by letting out to some other party. Since the business premises was leased out as a commercial asset, the rent receipt was assessable under the head `Business income'.
4. The revenue filed an appeal before the Tribunal which was rejected. While rejecting the appeal, the Tribunal relied upon a judgment of this court in CIT v. Anand Rubber & Plastics (P.) Ltd. .
5. The counsel for the parties have been heard.
The counsel appearing for the revenue argued that in Anand Rubber & Plastics (P.) Ltd.'s case (supra) what was held by this court was that the question whether the rent received is assessable income from property or business income, would depend on the facts and circumstances of each case as what has to be seen is whether the asset is being exploited commercially or whether it is being let out for the purpose of enjoying rent. The distinction between the two being narrow, the same would depend on the peculiar facts of each case; it was further argued by him that in this case the Tribunal has not recorded any finding that the premises were not let out for being exploited commercially and, therefore, a question of law does arise from the order of the Tribunal.
6. It is true the Tribunal has not recorded any positive finding on this point but while dismissing the appeal, it has upheld the finding recorded by the first appellate authority that the let out premises were leased out for commercial purpose with a motive to reduce the burden of expenditure and to reduce the loss. It would have been better if the Tribunal had recorded its own positive finding but on the facts we find that the assessee had shifted its premises from the old place to the new place due to commercial expediency and let out the old premises with a motive to reduce the burden of expenditure which it incurred for shifting to the new premises. The finding recorded by the first appellate authority which was upheld by the Tribunal to the effect that the old premises were let out for commercial exploitation to reduce the burden of expenditure and to reduce the loss, is a finding of fact and falls in line with the law laid down by this court in Anand Rubber & Plastics (P.) Ltd.'s case (supra) and, therefore, no referable question of law arises from the order of the Tribunal. Dismissed.