MARWARI HOTEL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, 'B' Bench, Patna, has referred the following question of law for the decision of this court under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"):

(2.) THE brief facts are the following : THE assessment year in question is 1972-73. THE assessee in its return claimed a loss of Rs. 98,434 as allowable under Section 32(1)(iii) of the Act, though no such loss was claimed in the profit and loss account. That was explained before the Income-tax Officer saying that the assessee took a building for the purpose of its business on a leasehold land and the terms of the lease came to an end on March 31, 1972. It appears from the lease deed that the assessee took only the site and by spending a huge amount, put up a small structure. According to the lease deed, on the expiry of the term of the lease, the land along with any structure thereon was to revert back to the lessor without any compensation. Accordingly, the assessee surrendered the leasehold land along with the building standing thereon on March 31, 1972, to the lessor. THEre was no dispute on these facts.

(3.) WE have considered the rival submissions.