1994 (1) TMI 22

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.... : The assessee is an individual who had taken a property on rent for the purpose of business, on an agreement dated October 27, 1966, for a period of four years, paying a rent of Rs. 3,000 per mensem. This agreement provided that on termination, the tenant should vacate the premises, and in default, he would pay an amount of Rs. 5,000 per mensem till he vacates the property. The assessee, howe....

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....mmissioner allowed only the litigation expenses. The assessee appealed further. The Appellate Tribunal found that the liability to pay these amounts accrued only in the year in question on account of the decree of the court and, therefore, the deduction was admissible under section 37 of the Income-tax Act. At the instance of the Revenue, the following question has been referred : " Whether,....

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....pted rent of Rs. 3,000 in the accounts. The landlord having disputed the claim of the assessee of the renewal of the lease, the matter had gone to the court, and the additional amount had been decreed. The liability to pay the additional amount had thus accrued only when the court had decreed the suit. It is stated that when the matter was taken up on appeal, the assessee had subsequently compromi....