2000 (2) TMI 12

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....e and was thus not entitled to any expenditure being allowed for that purpose in computing its income. The Government of Bombay on April 23, 1940, granted to the predecessor of the appellant, lease for a period of 30 years on the terms and conditions set out therein. These were mining leases, Clause 3 in Part V of the lease and clause 17 in Part VII are relevant for our purpose. These are (see [1987] 168 ITR 433) : "Clause 3, Part V : The lessee shall pay to the Government in respect of all parts of the surface of the said lands which shall from time to time be occupied or used by the lessee under the authority of these presents rent at the rate of Re. 0-0-6 per annum per square yard of the area so occupied or used together with land ....

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....vel in good repair, order and condition and fit in all respects for further working of the said minerals." It is not necessary for us to go into the various facets of the proceedings before the Revenue authorities except we note that the Income-tax Appellate Tribunal ("the Tribunal", for short), held that the expenditure incurred by the appellant for the purpose of restoring the lease land to the original condition was permissible expense under section 37(1) of the Income-tax Act, 1961. This was on the basis of interpretation of the aforesaid two clauses. However, there is a clear finding that during the relevant years the appellant did not incur any expense to restore the lands to their original condition. The following two questions....