NEEL KAMAL TALKIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Tribunal has referred the following question for the opinion of this court :

(2.) THE assessee is a partnership firm. It owns a cinema, known as the Neel Kamal Talkies at Bijnore. THEre is another cinema house at Bijnore known as the Virendra Talkies. It was run by M/s. Prakash Talkies Distributors, Delhi. THE assessee entered into an agreement with M/s. Prakash Talkies Distributors under which it was agreed that in consideration of the assessee's paying a sum of Rs. 600 per month for a period of 5 years to M/s. Prakash Talkies Distributors, the latter would not exhibit any film at Virendra Talkies.

(3.) AS long ago as Atherton v. British Insulated and Helsby Cables Ltd., [1926] A.C. 205 ; [1925] 10 T.C. 155 (H.L.)., it Was pointed out that expenditure may be treated as capital expenditure when it is made not only once and for all but with a view to bringing into existence an asset or advantage for the enduring benefit of the trade. In ASsam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, [1955] 27 I.T.R. 34, 45; [1955] 1 S.C.R. 972 (S.C.). the Supreme Court observed :