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Associated Bombay Cinema P. Ltd. Vs. Commissioner of Income-tax, Bombay City I - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Reference No. 105 of 1966
Judge
Reported in[1978]111ITR942(Bom)
ActsIndian Income-tax Act, 1922 - Sections 10, 12 and 66(2)
AppellantAssociated Bombay Cinema P. Ltd.
RespondentCommissioner of Income-tax, Bombay City I
Excerpt:
direct taxation - expenditure - sections 10, 12 and 66 (2) of income tax act, 1922 - question pertains to item of rs. 75000 incurred as expenditure of assessee-company in prosecuting winding up petitions preferred by several creditors of lessee-company - tribunal recorded finding that assessee has not shown how it was necessary for it to take up winding up proceedings or to finance proceedings taken out by 3rd parties for winding up lessee-company - tribunal justified in law in not allowing item of rs. 75000 as expenditure of revenue nature. - .....from the lease rent earned by the applicant from letting out the strand cinema was income assessable under section 12 and not under section 10 of the indian income-tax act, 1922 (2) whether, on the facts and in the circumstances of the case, the tribunal was justified in law in not allowing the item of rs. 75,000 as expenditure of revenue nature ?' 2. the question which principally arises pertains to the item of rs. 75,000 which has been incurred as an expenditure of the assessee-company in prosecuting certain winding-up petitions which had been preferred by several creditors of the lessee-company, viz., m/s. western india theatres ltd. the tribunal has recorded a finding that the assessee has not shown how it was necessary for it to take up winding-up proceedings or to finance.....
Judgment:

Tulzapurkar, J.

1. In this reference made to this court under section 66(2) of the Indian Income-tax Act, 1922, the following two questions have been referred to us for our opinion :

'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the income from the lease rent earned by the applicant from letting out the Strand Cinema was income assessable under section 12 and not under section 10 of the Indian Income-tax Act, 1922

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in not allowing the item of Rs. 75,000 as expenditure of revenue nature ?'

2. The question which principally arises pertains to the item of Rs. 75,000 which has been incurred as an expenditure of the assessee-company in prosecuting certain winding-up petitions which had been preferred by several creditors of the lessee-company, viz., M/s. Western India Theatres Ltd. The Tribunal has recorded a finding that the assessee has not shown how it was necessary for it to take up winding-up proceedings or to finance proceedings taken out by third parties for winding up the lessee-company. In view of this finding which has been recorded question No. 2 will have to be answered in the affirmative and against the assessee. We answer accordingly.

3. In view of our answer to question No. 2, question No. 1 need not be answered.

4. There will be no order as to costs.


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