1957 (9) TMI 61

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... . Amin with G. N. Joshi JUDGMENT Tendolkar, J. The assessee before us is the Gopal Mills Co. Ltd., Ahmedabad, who have owned a textile mill for many years and manufacture textiles therein. The land on which the mills are situated is leasehold and about twenty-five years of the lease had to run during the relevant accounting year. The mills used to discharge waste water which accumulated in a pi .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ,454 for filling up the pit. The question that arises for our determination on this reference is whether this amount is an allowable deduction under section 10(2)(xv) of the Income- tax Act. Now, apart from any authority and looking at the transaction by itself there can be little doubt that this cannot be a revenue expenditure. In the first instance, if the pit had been filled up when the mills .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... f the operations in connection with the running of the mills. To that extent a new asset of an enduring character was brought into existence. That the unexpired period of the lease is only 25 years does not make the asset any the less enduring. Mr. Mehta for the assessee has drawn our attention to a decision of a Division Bench of this court in Income-tax Reference No. 17 of 1950 delivered on the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... sed for the legitimate purposes of the mills. Mr. Mehta also relies on a judgment of the Punjab High Court in Commissioner of Income-tax, Delhi v. S.B. Ranjit Singh [1955] 28 I.T.R. 14. The assessee in that case leased his hotel complete with furnishings and fittings for twenty years at an annual rent of ₹ 50,000 and he incurred an expenditure in re-surfacing with concrete the approach road .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... grown deeper and deeper, and, therefore had to be filed up during the accounting year. This appears to us to be a clear case where no asset was sought to be maintained or preserved by the expenses incurred : but the expenses were incurred in rendering what was a pit-and therefore a liability and a nuisance to the neighbourhood into an asset which is useful to the assessee. In our opinion, the Tri .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X