1936 (12) TMI 27

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.... JUDGMENT Two questions have been referred to us by the Commissioner of Income-tax, viz., "(1) Whether the sum of Rs. 30,450 paid by the assessee to the Government under the instrument of lease dated 2nd July, 1930, is inadmissible as a revenue expenditure; and (2) whether after dissolution of the partnership the Income-tax Officer had jurisdiction to assess the firm as a un....

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....icer as being a payment out of revenue and not a capital expenditure. Subsequently, having regard to this High Court's decision in U. Chengalvoraya Mudaliar v. The Commissioner of Income Tax, Madras, that allowance was cancelled and the sum was treated as a capital expenditure in the hands of the assessee. Hence this reference. In our view, the facts of this case are not distinguishable from t....

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....howing that the payment to be made under the instrument was a payment by way of rent and therefore a revenue expenditure and not a capital expenditure as in Chengalvoraya Mudaliar's case. We are unable unable to see that those words make any material difference. The transaction in question is exactly the same as that in Chengalvaroya Mudaliar's case and the use of the words "annual lease a....

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....irm. The words are, in our opinion, perfectly clear but Mr. Subbaroya Ayyar contends that unless an assessment upon the firm has already been made before its discontinuance, which is not the case here the partners of it cannot be assessed jointly after its discontinuance, because according to him the words "tax payable" in the section mean "payable as the result of an assessment already made upon ....