COMMISSIONER OF INCOME TAX Vs. JAGAT CINEMA

JUDGEMENT

(1.) The following question hasbeen referred to this Court under section 256(1) of theIncome tax Act, 1961.

(2.) The statement of the case relates to the assessmentyear 1962-63. The relevant previous year ended on 31/12/1961. Jagat Cinema (Bareilly), the assessee,is a partnership firm. The assessee took Cinema Hall,known as Jagat Cinema, with shops and out housessituated in Bareilly on lease under a lease deed dated 20/12/1957. The period of the lease began from 1/01/1957 and terminated on 31/12/1961. Clauses (6), (10) and (11) of the lease deed readas under:-

(3.) During the relevant previous year the lintel nearthe stage of the cinema hall collapsed as a result ofwhich damage was caused to the screen and the stage.The lintel was reconstructed by the assessee in pursuance of the aforesaid terms of the lease deed. Whilereconstructing the stage and the screen, the assessee increased the dimensions. Rs. 11,418.00 were spent by theassessee on the above construction and be claimed thatamount as a permissible deduction. In answer to thequery of the Income-tax Officer regarding the increasein the expenditure under the head "repairs and renewals"the assessee wrote as under: