HUMAYUN PROPERTIES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS income-tax reference under s. 66(1) of the IT Act raises the following question of law for decision :

(2.) THE facts briefly are as follows : THE assessee-company, Humayun Properties Ltd., carries on business of cinema exhibitors. Amongst other houses, it is the owner of the two well-known show houses in Calcutta, called the Light House and the New Empire. THE accounting year ended on 30th Sept., 1949. During that year of account the assessee incurred certain expenses which it called as "renovation expenses". Under the head "New Empire renovation", the expenditure amounted to Rs. 91,994-10-9 and under the head "Light House renovation", the expenditure amounted to Rs. 1,48,318. THE ITO allowed 10% of the claim as current repairs and disallowed Rs. 82,796 for new Empire renovation and also disallowed Rs. 1,34,386 as Light House renovation. THE total of these disallowed renovation expenditure amounted to Rs. 2,17,182. THE AAC upheld the ITO's disallowance of Rs. 2,17,182. THE Tribunal also affirmed the decision holding that the renovation was not in the nature of current repairs within the meaning of s. 10(2)(v) of the IT Act. THE Tribunal expressly states that the only question before them was whether renovation was current repairs and whether in part it can be allowed as current repairs. It referred to the decision of Ramkishan Sunderlal vs. CIT (1951) 19 ITR 324 (All) : TC15R.319, a decision of the Allahabad High Court of Mallick C.J. and Bhargava J., and the Madras decision of Satyanarayana Rao J. and Raghava Rao J. in CIT vs. Sree Rama Sugar Mills Ltd. (1952) 21 ITR 191 (Mad).

(3.) THE next case is of the Madras High Court in CIT vs. Sree Rama Sugar Mills Ltd. (supra), a decision of a Division Bench of Satyanarayana Rao and Raghava Rao JJ. THEre in that case Satyanarayana Rao J. observed at page 197 as follows :