COMMISSIONER OF INCOME-TAX BOMBAY CITY-I Vs. D L KANHERE
HIGH COURT OF BOMBAY
COMMISSIONER OF INCOME-TAX, BOMBAY CITY-I
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Kantawala, J. -
(1.) By this reference under section 66(1) of the Indian Income-tax Act, 1922, the following two questions are referred to us for our determination :
"Whether the income from the lease of the Kohinoor Cinema building, which had been equipped as a cinema theatre, is assessable under section 12 of the Indian Income-tax Act, 1922, or under section 9 of the Ac ?" and
"Whether the mortgage interest allocated to the building, K (Rs. 28,052 and Rs. 31,583, as the case may be), is an admissible deduction properties (other than 'the building, K') for theassessment years 1958-59 and 1959-6 ?"
(2.) Questions referred to us arise out of the reassessment made upon the assessee for the assessment year 1958-59 and 1959-60, the relevant accounting years being the corresponding financial years ending March 31, 1958, and March 31, 1959.
(3.) The assessee is the owner of three house properties. One of them has been equipped as a cinema theatre. All the three house properties were mortgaged with a view to secure repayment of losses in his speculation business. There were two mortgages in respect of these properties. Under the first mortgage deed all the three properties were mortgaged with a view to secure repayment of a loan of Rs. 3 1/2 lakhs and the interest payable thereunder. Later, on the assessee created a second mortgage in respect of the very same three mortgaged properties.;
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