NASIM SIKANDAR, J.---The Lahore Bench of the Income-tax Appellate Tribunal, at the instance of the Commissioner, Income-tax, Lahore, has framed the following question for our answer:--- "Whether on the facts and in the circumstance of the case, the Tribunal was right in holding that the rental income from property was not assessable under section 9 but under section 10 of the Income-tax Act?"
2. The assessee, a private limited company for the assessment years 1969-70 and 1970-71, returned income from different sources. The Assessing Officer by way of the assessment order, dated 26-6- 1973 treated the declared income from property under section 9 of the Late Act, 1922. On appeal the Income-tax Appellate Tribunal with reference to their earlier decision recorded in respect of the same assessee proceeded to direct that income declared from business property let out should be assessed under section 10 of the Act instead of section 9.
3. After hearing the learned counsel for the Department, we are of the view that the answer to the question needs to be in the affirmative. Section 9 of the Late Act provided for assessment of income tax under the head property in respect of bona fide annual letting value of the property comprising of buildings etc. On the other hand, section 10 of the Act provided that tax shall be payable by an assessee under the head profits and gains of business profession or vocation in respect of the profits or gains of any business profession or vocation carried on by him.
4. It appears that the assessee declared income from property under the head business showing the letting out of the properties as part of his business. The Assessing Officer without assigning any reason or recording any finding proceeded to reject the claim. Obviously the issue of letting out of property is part of business of assessee necessarily involves factual inquiry. The Assessing Officer while treating the income from property under section 9 of the Late Act did not repel the claim of the petitioner that letting out of the property was part of his business. The Tribunal with reference to its earlier decision in respect .Of the same assessee proceeded to allow the relief. The earlier decision of the Tribunal which formed basis of their judgment in the two years under review does not appear to have been assailed further by the Department.
5. An Assessing Officer is required to support his findings by cogent reasons and by bringing on record sufficient material when he is to proceed to reject a claim of the assessee that income disclosed by him fell under a particular head. Since that was not done, the Tribunal was justified in following its earlier order. The finding of the Tribunal in fact amounts to holding as a fact that letting out property is part of business of the assessee. Since that finding has not been controverted our reply to the aforesaid answer is in the affirmative. .