PURAN CHAND SETH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee, in the present case, is an HUF represented by its Karta. It earns income from house property, money -lending and also from cinema exhibition business at Agra. Besides this, there was income in the asst. year 1964 -65 from film distribution business. The reference to this Court is in connection with expenditure amounting to Rs. 91,250 which the assessee claimed in respect of the New Taj Talkies at Agra.

(2.) THE cinema in question is on a monthly rent of Rs. 1,750 with the assessee. The District Magistrate, Agra, had pointed out certain defects in the building which had to be removed in order to get a renewal of the cinema licence. In the accounting period ending March 31, 1964, an amount Rs. 91,250 was spent on repairs to sanitary fittings amounting to Rs. 6,767, repairs to auditorium Rs. 25,132, labour for repairs Rs. 7,597 and renovation account Rs. 51,754. The expenses were for providing automatic flush type latrines, shifting of the ladies latrines, replacement of staircase, reconstruction of the floor of the auditorium, provision of a ceiling to the auditorium and reconstruction of the balcony, replacement of junglas and shifting of the ladies waiting room to some other place.

(3.) THE facts stated earlier seem to show that the expenditure is on capital account. However, the assessee is only a monthly tenant with no long -term lease, so the question is, can this be treated as a capital expenditure in the case of the assessee ?"A number of cases have been cited at the Bar. In Lakshmiji Sugar Mills Co. (P) Ltd. vs. CIT (1971) 82 ITR 376 (SC), certain contributions were made to the Cane Development Council for the purpose of construction and development of .