REGENT COMPUTRONICS PVT. LTD.

LIBERTY CINEMA Appellant

V/S

COMMISSIONER OF INCOME TAX Respondents

Referred Judgements :-

JUDGEMENT

(1.) THIS is a reference under s. 66(1) of the Indian IT Act. The reference seeks the answer of this Court to the following question: "Whether, on the facts and in the circumstances of the case, the sum of Rs. 24,498-12-6 incurred for repairs and renovation of the cinema hall and the sum of Rs. 9,890 incurred for legal expense could be allowed as expenses under any of the provisions of s. 10(2) of the Indian IT Act ?"

(2.) THE assessee is the lessee of a cinema house belonging to one Jagannath Prosad Roy. Jagannath gave a lease on the 18th Feb., 1946, of the house along with machinery, furniture and other fixtures to one Mahendra Narayan Roy for a period of five years with an option to renew the lease for another five years. THE interest of Mahendra Narayan Roy in the said property was sold on the 12th May, 1950, in auction sale on account of income-tax demands to the partners of the assessee-firm along with two other gentlemen, M/s Agarwalla and Advani. THE sale was held under the Public Demands Recovery Act. A sale certificate was granted on the 21st June, 1951. THEreafter, on the 26th July, 1951, and the 30th Sept., 1951, the assessee purchased the interests of M/s Agarwalla and Advani.

(3.) THE only other fact that should be set out here is that the cinema hall was closed for about seven months and the assessee had to renovate the building and furniture in order to properly start the business. In the statement of case the argument was that the business was carried on from the first day of the accounting year and the expense incurred for such renovation was also made during the time when the exhibition of the pictures was made. THE assessee claimed that the sum of Rs. 34,388 should be allowed as repairs under s. 10(2)(v) or as an expense under s. 10(2) (xv) of the IT Act. THE said expense included Rs. 9,890 incurred after the commencement of the business for legal expenses in connection with the proceedings for setting aside the certificate sale and Rs. 24,498-12-6 and Rs. 9,890 are the subject-matter of the question referred to us.

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LIBERTY CINEMA Vs. COMMISSIONER OF INCOME TAX

Referred Judgements :-

JUDGEMENT

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