TMI Blog1970 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... of dye works certain structures. Under an indenture of lease dated April 30, 1952, the, assessee company leased out a portion of 439 sq. yds. of the above land for a period of five years to the Caddel Weaving Mills Co. Ltd., on the terms and conditions contained in the said indenture of lease. The consideration for the lease mentioned in clause 1 of the operative part is "the expenses to be incurred by the tenants in the erection of a factory and of the rent and covenants hereinafter mentioned". Under clause 2, the tenant-weaving mill agreed to pay and discharge all existing and future rates and taxes in respect of the demised land. It also agreed to construct at its own cost a building on the demised land in accordance with the plans, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid was Rs. 100 per month. The tenant-weaving mill exercised the option and the period of the lease was extended and the lease lasted in the aggregate for ten years. These ten years having expired, in the assessment year 1958-59 and the accounting year ending December 31, 1957, the assessee-company received back the building construction which had been put up by the tenant-weaving mill at the cost of Rs. 1,30,000 on the land demised. In connection with the receipt of this building, the assessee-company made a credit entry in the capital account maintained in the books of accounts for the above assessment year for Rs. 70,000. The entry disclosed that this sum represented the original cost of construction of Rs. 1,30,000 less depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In that ,connection provisions are made in the lease creating certain obligations against the tenant-weaving mill. These have already been recited above. Mr. Joshi.referred to section 105 of the Transfer of Property Act, which defines "lease" and, inter alia, provides. " A lease..... is a transfer of a right to enjoy..... property, . . . . in consideration of a price paid or promised, or of money....... or any other thing of value, to be rendered periodically or on specified occasions to the transfer or by the transferee ........" Mr. Joshi contended that the delivering over of the constructed building, which was agreed to be of the minimum value of Rs. 50,000, was the "other thing of value to be rendered on specified occasions" by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record to make a finding in favour of the revenue that the building acquired at the expiration of the term of the lease in the assessment year 1958-59 represented deferred rent. This is so because evidence was not brought on record by the revenue to prove that the rent of Rs. 100 per month agreed to be paid was reduced rent and that in fact a much larger rent represented by the value of the above building divided by 126 months of lease could have been charged by the assessee-company when it granted the lease. In this connection it is important to notice that the lease provided that the tenant-weaving mill need not expend more than Rs. 50,000 in the construction of the building. The tenant-weaving mill did not bother about that minimum agree ..... X X X X Extracts X X X X X X X X Extracts X X X X
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