TaxTMI 
TaxTMI 
1970 (2) TMI 42
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..... Ltd., on the terms and conditions contained in the said indenture of lease. The consideration for the lease mentioned in clause 1 of the operative part is "the expenses to be incurred by the tenants in the erection of a factory and of the rent and covenants hereinafter mentioned". Under clause 2, the tenant-weaving mill agreed to pay and discharge all existing and future rates and taxes in respect of the demised land. It also agreed to construct at its own cost a building on the demised land in accordance with the plans, elevations, sections and specifications to be approved and signed by the architect of the assessee-company and to the satisfaction of the said architect. The building was to be for a weaving mill and the tenant-weaving mi....
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....ear 1958-59 and the accounting year ending December 31, 1957, the assessee-company received back the building construction which had been put up by the tenant-weaving mill at the cost of Rs. 1,30,000 on the land demised. In connection with the receipt of this building, the assessee-company made a credit entry in the capital account maintained in the books of accounts for the above assessment year for Rs. 70,000. The entry disclosed that this sum represented the original cost of construction of Rs. 1,30,000 less depreciation at the uniform rate of five per cent. for the period of ten years. The case of the assessee-company before the tax authorities was that the building construction acquired by the assessee-company was of the value of Rs. ....
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....efines "lease" and, inter alia, provides. " A lease..... is a transfer of a right to enjoy..... property, . . . . in consideration of a price paid or promised, or of money....... or any other thing of value, to be rendered periodically or on specified occasions to the transfer or by the transferee ........" Mr. Joshi contended that the delivering over of the constructed building, which was agreed to be of the minimum value of Rs. 50,000, was the "other thing of value to be rendered on specified occasions" by the tenant-weaving mill to the assessee-company in this case. He, therefore, contended that the value of the building acquired by the assessee-company upon the expiration of the lease was in the nature of rent or revenue receipt. In h....