TMI Blog1965 (3) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... took on lease the premises No. 157, Upper Circular Road, Calcutta, for a term of 99 years from the sons of Shrish Chandra Pal, deceased, and their mother on a monthly rent of Rs. 750. The important conditions of the lease were that the assessee was at liberty to assign the lease with the consent of the lessor and that he could alter the constructions on the premises with a view to run a cinema, if necessary. After spending a sum of Rs. 35,000 on some alterations to the premises, the assessee required finance for converting it into a cinema-house and for that purpose he executed a deed of lease on the 23rd February, 1946, in favour of Nani Gopal Dutt, Makhan Lal Dutt and Shiv Kumar Khanna, whereby the said constructions at 157, Upper Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to grant to them a lease of the said cinema-house which the lessor has agreed to do upon payment by the lessees of the said agreed sum of Rs. 55,200 towards the cost of building the said cinema-house and whereas the lessees have paid to the lessor the said sum of Rs. 55,200 for which separate receipt has been granted by the lessor. Now this witnesseth as follows : In consideration of the rents hereinafter reserved and of the covenants and agreements on the part of the said lessees hereinafter contained the lessor doth hereby sub-demise a lease unto the lessee of all that messuage tenement or cinema-house now in course of construction ... for a term of 30 years computed from the date on which possession of the cinema-house will be deliver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal who held that the said sum of Rs. 55,200 constituted a payment in advance of rent and, as such, was a revenue receipt and taxable. The question of law that has arisen out of the said facts is as follows : " Whether, on the facts and circumstances of the case, the sum of Rs. 55,200 was a revenue receipt being rent received in advance thus liable to be taxed ?" Mr. Pal, learned advocate for the assessee, has strenuously argued that the said sum of Rs. 55,200 cannot be held to be revenue receipt inasmuch as the said sum, on the construction of the lease itself, cannot constitute rent received in advance. According to him, there has been no finding that the rent payable by the lessees is not adequate or unreasonable or below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances. The deed of lease, which is being relied upon by both the parties, itself categorically states that the lessees agreed to pay to the assessee the said sum of Rs. 55,200 towards the costs of erection of the said cinema-house according to their suggestion and other charges and expenses incurred therefor by the lessor. The agreed statement of case mentions the fact that the assessee, after spending Rs. 35,000 on construction of the cinema-house, required finance for completing the same. The deed of lease also mentions the fact that an estimated total cost of erection would amount to about Rs. 1,00,000. Thus, the only object of the payment of the said sum of Rs. 55,200 could only be to advance the balance costs of construction or to mee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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