COMMISSIONER OF INCOME-TAX BOMBAY CITY-I Vs. J VOYANTIZIES
HIGH COURT OF BOMBAY
COMMISSIONER OF INCOME-TAX, BOMBAY CITY-I
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K.K.Desai, C.J. -
(1.) In the reference under section 66 (1) of the Indian Income-tax Act, 1922, the question of law referred to this court reads as follows : "Whether, on the facts and circumstances of this case, the sum of Rs. 82,460 is liable to be taxed in the hands of the assessee?"
(2.) The question relates to the assessment year 1948-49, the relevant previous year being the calender year ending 31st December, 1947. The facts which requre to be noticed are as follows : Under an agreement of lease dated 21st July, 1942, the relevant previous year being the calender year ending 31st December, 1947. The facts which requires to be noticed are as follows : Under an agreement of lease dated 21st July, 1942, the assessee agreed to become a tenant of certain premises situated at plts. Nos. 7 and 12, Marine Drive, for using the premises as a boarding and loding hotel. The lease was to commence from the date the building was ready and completely constructed and possession was delivered to the assessee. The assessee was to provide crockery, cutlery, silverware, glassware, nupkins and such other things for runnig the business of the hotel. That lease was to be for a period of five years from the date of delivery of possession of the building for running the hotel.
(3.) By a requisition order dated 25th April, 1942, the Government of India requisitiioned and directed delivery of possession of the prperty to the army authorities. The requsition was to continue for the period of the war and six months thereafter. The assessee, thereupon, made certain representations and the army authorities then made a catering contract with the assessee. He carried on the business of this catering contract and served the army authorities thereunder from 1st January, 1943, to 31st october, 1943. That contract was then termintated and from 1st November. 1943, the premises continued in the possession of the army authorities. The catering contract was fromt that the date given to the landlords of the premises. In this connectioin another order dated 13th November, 1942, was passed and under that oder the entire premises along with the equipment for catering was taken over by the Government. Having regard to the above situation on 31st October. 1943, the assessee sold awaya some equipment for catering was taken over by the Government. Having regard to the above situation on 31st October, 1943, the assessee sold away some equipment that he had purchased for running the catering business also to the landlords of thr premies. The assessee, thereafter, by his letter dated 19th October, 1945, lodged a claim of Rs. 6 lakhs. The particulars of the claim were that the assessee would make profit of rs. 15,000 per month and Rs. 1,80,000 per year. he would have to bear income-tax at the year. The lease was ot be fo a period of 5 years and with option to extend it for another period of 5 years. For the period of 5 years of the lease he was entitled to Rs. 3 lakhs for disturbance and Rs. 3 lakhs for goodwill making Rs. 6 lakhs in all.;
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