JUDGMENT MACHANDA J. - This is a case stated under section 66(1) of the Income-tax Act, 1922. The question referred is :
"Whether the surplus of Rs. 37,385 arising from the sale of plant and machinery of an ice factory is chargeable to income-tax under section 10(2) (vii) of the income-tax Act as deemed income of the assesse ?"
The finding of fact given by the tribunal is that the business was not carried on during the previous year and this finding of fact has been accepted by the revenue. The question referred now stands concluded by a decision of the supreme Court in Commissioner of Income-tax v. Ajax Products Ltd., where it had been laid down that, notwithstanding the second proviso to section 10(2) (vii) as amended in 1949, the profit from the sale of the assets could not be taxed because the proviso did not warrant the assumption of the legal fiction that during the calendar year when the sale took place the company should be deemed to be carrying on business.
The question is, accordingly, answered in the negative and against the department. The department will pay the costs of this reference, which we assess at Rs. 200. Counsels fee is also assessed at Rs. 200.
Question answered in the negative.