TMI Blog1936 (12) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax, viz., (1) Whether the sum of ₹ 30,450 paid by the assessee to the Government under the instrument of lease dated 2nd July, 1930, is inadmissible as a revenue expenditure; and (2) whether after dissolution of the partnership the Income-tax Officer had jurisdiction to assess the firm as a unit and whether Section 44 of the Act gives jurisdiction to the officer both to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Subsequently, having regard to this High Court's decision in U. Chengalvoraya Mudaliar v. The Commissioner of Income Tax, Madras, that allowance was cancelled and the sum was treated as a capital expenditure in the hands of the assessee. Hence this reference. In our view, the facts of this case are not distinguishable from the facts in Chengalvoraya Mudaliar's case. There it was held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by way of rent and therefore a revenue expenditure and not a capital expenditure as in Chengalvoraya Mudaliar's case. We are unable unable to see that those words make any material difference. The transaction in question is exactly the same as that in Chengalvaroya Mudaliar's case and the use of the words annual lease amount does not, in our opinion, alter its nature. The answer to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yar contends that unless an assessment upon the firm has already been made before its discontinuance, which is not the case here the partners of it cannot be assessed jointly after its discontinuance, because according to him the words tax payable in the section mean payable as the result of an assessment already made upon the firm . If this contention is correct, it leads to a strange result. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , tax which the firm or partnership would be liable to pay if it had not been discontinued ; tax either found to be due already or that will be found to be due in the future . That being so, we are clearly of the opinion that the Income Tax authorities were correct in assessing the partners of the discontinued firm jointly and severally in respect of the profits earned by the firm before it was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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