Lease of used premises can amount to transfer; relief depends separately on factual use of the old structure.

A lease of previously used premises can amount to a "transfer" within section 15C(2)(i) of the Indian Income-tax Act, 1922, because the statutory expression was construed broadly and the Tribunal's narrower view was held incorrect. The separate question whether the assessee's use of the earlier structure in the new undertaking finally defeated relief under section 15C(2) was not decided conclusively; it required further examination of the factual material and was left open for reconsideration. The statutory relief therefore remained dependent on the unresolved issue of the extent to which the old structure was utilised.

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Issues: (i) Whether lease of a previously used building amounted to a transfer within the meaning of section 15C(2)(i) of the Indian Income-tax Act, 1922; (ii) Whether the assessee's use of the earlier structure in the new undertaking finally negatived relief under section 15C(2).

Issue (i): Whether lease of a previously used building amounted to a transfer within the meaning of section 15C(2)(i) of the Indian Income-tax Act, 1922.

Analysis: The legal meaning of "transfer" in the provision was construed broadly. A lease of premises with an existing structure could fall within that expression. The Tribunal's contrary view that lease of the building did not amount to transfer was inconsistent with the correct construction of the provision.

Conclusion: The lease constituted a transfer within section 15C(2)(i), and the Tribunal's view on this point was erroneous.

Issue (ii): Whether the assessee's use of the earlier structure in the new undertaking finally negatived relief under section 15C(2).

Analysis: The extent to which the old structure was utilised, and whether the undertaking was nevertheless formed within the statutory requirement for relief, required further examination on the material available to the Tribunal. That question was expressly left open for the assessee to urge.

Conclusion: The entitlement to relief under section 15C(2) was not finally determined and was left for reconsideration by the Tribunal.

Final Conclusion: The reference was answered against the assessee on the construction of "transfer", but the ultimate availability of relief under section 15C(2) remained open for decision by the Tribunal on the remaining factual question.

Ratio Decidendi: For purposes of section 15C(2)(i), a lease of previously used premises can amount to a transfer, and the statutory relief must then be tested separately on whether the new undertaking was formed by substantial use of the old structure.

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