COMMISSIONER OF INCOME-TAX, POONA Vs. ALPANA TALKIES

JUDGEMENT

(1.) The two questions which have been referred to this court under sec. 256(1) of the I.T. Act, 1961, are as follows;

(2.) The assessee carries on business as an exhibitor of films at Poona. The theatre in which the assessee exhibits films was originally leased out by M/s. Ismail and Babumiyan, both sons of Rasulbhai, to one Homi Meher Mistry, for 20 years with effect from January 1, 1948, by lease deed dated May 30, 1949, at a rental of Rs. 800 per month. Homi Mistry assigned his interest in the said theatre to one Maganlal L. Desai, by assignment deed dated June 8, 1949, for the residue of the lease period of 20 years. In their turn Maganlal Desai and the other parties assigned their right, title and interest to one Tayabali K. Mehta by an assignment deed dated September 24, 1952. There was a further assignment deed dated August 25, 1960, between Tayabali and Kalibuddin on the one side and K. C. Thakore on the other by which the theatre became vested in K. C. Thakoore for the residue of the said period of 20 years. Then there was another document between Ismail and Babumiyan on the one hand and K. C. Thakore on the other modifying the terms of the original lease dated May 30, 1949, and the lease was for a period of 20 years commencing from November 1, 1960. Under this lease, the lessee was to keep the theatre in good condition and make all repairs and the premises were to be surrendered with the fittings and fixtures and additions and alternations on the expiry of the lease period.

(3.) There was a subsequent agreement dated March 4, 1965, on the same lines as the agreement dated November 21, 1960, but the period of lease was 31 years from March 1, 1965. It was be pointed out that this document, dated March 4, 1963, recites the fact that the lessee, K. C. Thakore, "has constructed a new building with the consent and concurrence of the lessors, after having obtained permission permission No. 212 of the May 11, 1962, from the Poona Municipal Corporation, on the premises demised and leased out to him under the said indenture of lease dated November 21, 1960. "As it was felt by us that the two lease deeds dated, November 21, 1960, and March 4, 1965, should be part of the record and were necessary for a proper appreciation of the facts of the case, we have taken on record a compilation filed by the assessee but the only two documents which are now treated as a part of the record are the two lease deeds dated November 21, 1960 and March 4, 1965, annexs. D and E, respectively.