TMI Blog1970 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... hich it was claimed arose from the order of the Tribunal, dated March 13, 1964, relating to the assessment year 1954-55. The respondent-company was engaged during the previous year ending on December 31, 1953, relevant to the assessment year 1954-55 in mining mica and dealing therein. Madan Lal was one of the directors of the company. He had taken for himself a lease of mining rights of village Gadhi Majladih in the district of Hazaribagh for a period of 15 years from April 1, 1928. The lease was to expire on March 31, 1943. According to the terms of the lease the lessee had the option of renewal for a further period of 20 years on the expiry thereof. Madanlal gave a sub-lease of the mining rights to the respondent-company with the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that after the expiry of the lease on April 1, 1943, and the refusal to the lessor to renew the same the respondent was in the position of a trespasser particularly after the dismissal of the suit for specific performance by the trial court. Until the suit was compromised in the High Court in 1953 it could not be said that the respondent's liability had become ascertained. In other words, it was only as a result of the compromise in the year 1953, that the respondent became entitled to remain in possession of the land on payment of rent. The payment of the sum of Rs. 42,473 thus represented revenue expenditure by the respondent. The Commissioner of Income-tax applied to the Tribunal to state the case and refer the following question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon which it could arrive at such a conclusion (see Commissioner of Income-tax v. Chandulal Keshavlal Co.). The Tribunal, in the present case, had clearly found that it was only as a result of the compromise that the respondent became entitled to remain in possession of the demised land. Its liability also became ascertained only at that point of time. It cannot be disputed that the respondent in incurring the expenditure had acted in the interest of and for the purpose of its business. The expenditure was not laid out for any purpose other than that of carrying on the business. The deduction was properly admissible under section 10(2)(xv) of the Act and the matter being self-evident the High Court was fully justified in declining to acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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