NEW SAVAN SUGAR & GUR REFINING CO. LTD. vs COMMISSIONER OF INCOME-TAX, CALCUTTA

The Supreme Court held that the income of the assessee-company, which was derived from a lease agreement, could not be classified as 'profits and gains of business' under Section 10 of the Income-tax Act, 1922, but rather as 'income from other sources' under Section 12. The Court emphasized that the primary condition for Section 10's applicability is that the assessee must be carrying on a business, which was not the case here as the company intended to cease its business operations. Consequently, the High Court's ruling was upheld, denying the assessee additional depreciation and development rebate under Sections 10(2)(vi-a) and (vi-b).