1977 (2) TMI 37

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.... the claim was that though the exhibition of the films had been suspended by the order of the District Magistrate as he held the assessee an illegal occupant of the premises after the expiry of the lease, the assessee did not accept that position and continued to contest the case. The expenses incurred were on account of rent and salaries etc. Which being incidental to business should have been allowed. This plea did not find favour with the Income Tax Officer who held that the business had been closed with effect from 26th Sep.,1970 by the order of the District Magistrate, the expenses claimed were on account of discontinued business. It may be mentioned that the lease of the premises was restored and the licence renewed in January, 1974. ....

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....ahabad High Court reported in 23 I.T.R 437 as also a judgment of their Lordships of the Supreme Court reported in 23 I.T.R. 392 and their observation on page 407. The learned Departmental Representative also contended that the order of the District Magistrate resulted in complete discontinuance of the business of the assessee and the ratio of the decision relied upon by him squarely applied to the assessee's case. He further contended that the fresh application for the licence was a case of new licence and, therefore, even on facts, the business carried on after January,1974 was a new business, the earlier one having been discontinued and, therefore, the expenses claimed had rightly been disallowed. The learned counsel for the assessee in r....

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....eh aapse prarthana hai ki Shanker Talkies, Hapur ka licence navikaran karne ki kripa karen. Dhanyaward. Bhawdiya Sd SURAJMAL Salagn, Bhawan ke swamiyon ka sukrati patra." APPENDIX I (See Rules 2 (v) and 7) FORM OF LICENCE UNDER THE CINEMATOGRAPH ACT, 1918. Government (Seal) of India No. 16/74 (a) Shanker Talkies. Situated at 8(b) Hapur within the District of Meerut is licenced under section 3 of the Cinematograph Act, 1918 (Act XI of 1918) as a place where exihibitions by means of a cinematograph may be given from 2nd Jan, 1974 to 31st March, 1974 both days inclusive. The licence has been granted to (c) Shri Suraj Mal Garg and shall be terminated forthwith if the said (c) Shri Suraj Mal Garg ceases to own, t....

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....2) (i), (ii), (iii) (13) SHEDULE Total No. of Seats Fire appliances Exhaust Fans Electric Fans Sanitary requirements Remarks 438 48 3 16 Latrines 5 . . . . Urinals 10 120 gallons of water stored in a drum in reserve stock Sd T.N.Dhar District Magistrate, Meerut. The 2nd January, 1974 Renewed upto30th April, 1974. Sd T.N.Dhar District Magistrate, Meerut. Renewed upto31st March 1974. Sd T.N.Dhar District Magistrate, Meerut. 3/5" 5. From these two documents it is abundantly clear that the assessee had to suspend its business on account of the order of the District Magistrate but the business did not discontinue, because the assessee was agi....