1970 (4) TMI 6

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....ng the previous year ending on December 31, 1953, relevant to the assessment year 1954-55 in mining mica and dealing therein. Madan Lal was one of the directors of the company. He had taken for himself a lease of mining rights of village Gadhi Majladih in the district of Hazaribagh for a period of 15 years from April 1, 1928. The lease was to expire on March 31, 1943. According to the terms of the lease the lessee had the option of renewal for a further period of 20 years on the expiry thereof. Madanlal gave a sub-lease of the mining rights to the respondent-company with the same convenants for renewal for a like period. On the expiry of the lease on April 1, 1943, the lessee refused to renew the lease. Madanlal filed a suit on April 15, 19....

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....larly after the dismissal of the suit for specific performance by the trial court. Until the suit was compromised in the High Court in 1953 it could not be said that the respondent's liability had become ascertained. In other words, it was only as a result of the compromise in the year 1953, that the respondent became entitled to remain in possession of the land on payment of rent. The payment of the sum of Rs. 42,473 thus represented revenue expenditure by the respondent. The Commissioner of Income-tax applied to the Tribunal to state the case and refer the following question of law : " Whether, on the facts and in the circumstances of the case, the sum of Rs. 40,132 was payment of a revenue nature and, as such, allowable as deductio....