A Y S PARISUTHA NADAR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN 1947, the assessee purchased a cinema house known as the Gnanam Talkies. At that time a lessee was in occupation and under the terms of the sale deed the lease was continued in force. The assessee was in receipt of Rs. 2, 700 as annual rent and this income was being assessed in the assessee's hands as income from property The lease was due to expire in December, 1952. But the lessee did not surrender possession but continued as a tenant holding over on the expiry of the lease. A short while prior to the expiry of the lease, there had been a cyclone which had caused some damage to the cinema theatre. Apparently, the lessee carried out the necessary repairs and continued his business as a film exhibitor. On the failure of the lessee to surrender possession, the assessee took steps to evict him. His petition before the House Rent Controller failed. While the matter was pending appeal in the sub-court, the parties came to a compromise as a result of which the assessee paid a sum of Rs. 17, 000 to the lessee and obtained possession of the premises together with certain items of machinery and furniture. Such possession was taken by him on 1st July, 1953

(2.) THEREAFTER, the assessee carried out extensive repairs to the cinema house. A total sum of Rs. 36, 318 was spent by him. After reconditioning the theatre, the assessee started exhibition of films in this cinema house on and from 5th November, 1953

(3.) HIS further appeal to the Tribunal also failed and, on an application to this court, the Tribunal was directed to refer the following question for the determination of this court