9911796707
TMI Blog1987 (10) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ented the genuine business expenses of the partnership. There was no justification with the authorities below to disallow the same specially in view of the award of the arbitrator and other related circumstances obtaining in the case. " 2. By status the assessee is a registered firm and its accounting period was the year ending31-3-1978. The assessee obtained lease of cinema from M/s. Kapoor & Sons, sister concern, by an agreement dated16-5-1977. The assessee claimed during the assessment proceedings that it paid a sum of Rs. 1,25,000 by way of compensation to the lessor because of various liabilities saddled on the assessee on account of its lapses. It was pointed out that the liability was saddled on account of irregular maintenance and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of the lease and also when the landlord is admittedly not saddled with any additional burden. A perusal of award by the Arbitrator shows that he has taken into account circumstances which do not exist and has awarded the compensation taking into account not any actual liability against the landlord but various imaginary and likely liabilities which may be created in due course of time against the landlord. Further it is seen that he has taken into consideration alleged infringements of various clauses of the agreement when actually there is no infringements. For example, the allegation that the assessee has let out a portion of cinema to M/s. Laxmi Commercial Bank and thus violated the agreement is false as clause 17 of the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore arbitrator is not based upon any actual happenings but upon surmises and unfounded allegations and possible liability. I have also seen records of the landlord firm. There is no such liability for which compensation is claimed by the assessee-firm. Under these circumstances, I approve the proposed addition there being no violation of infringement of any of the important clause of the agreement including clauses No. 1, 2, 5, 6, 9, 10, 16 and 17 which have weighed with the arbitrator. Objection rejected. " 4. The addition was contested by the assessee and before the learned CIT (A) it was argued by Shri Y. P. Mahna, the learned advocate that the lessor-firm had been saddled with liabilities and loss of reputation. A copy of the order fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellant-firm was limited to the reimbursement of the loss or penalty which may be suffered by the lessor on account of the breach of any terms and conditions of the lease deed. From the evidence filed before the ITO/IAC or before me, no loss or penalty has been proved. In fact, there is no mention of any quantum of the loss or penalty suffered, except the unqantifiable loss of reputation. But then under the lease agreement there is no provision for the appellant-firm paying any compensation. For loss of reputation even in regard to the violation of Cinematographic Act, Article 13 of the Lease Deed provides that in the event of any infringement of the laws by the appellant firm, the lessors shall not be held liable at any time for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a part of the cinema building on rent to M/s. Laxmi Commercial Bank Ltd.,New Delhi. Termination of the lease deed was said to have been mentioned in the letter. Other correspondence from pages 9 to 15 between the parties was also made mention of Shri Mahna invited our attention to pages 16 & 17 of the paper book said to be a copy of award made by one Shri O. P. Kapoor said to be a mutually appointed arbitrator. Pages 18 & 19 were said to be the copies of the so-called notices issued by the DDA to the assessee regarding the alleged breach of the terms of the lease deed. At page 20 was said to be copy of the letter dated27-11-1978from the licensing authority of Delhi Corporation again pointing out the breach of the terms of the lease deed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is said to have functioned as an arbitrator. In the circumstances mentioned hereinabove he virtually is seen to have become a Judge in his own cause. Such a conduct is obviously against the set principles of jurisprudence. Thus, in the peculiar circumstances the whole affair appears to be a cooked up and concocted story. 9. It is seen that the said Kapoor was running a cinema and any lapse if at all was caused in the running he alone was responsible for that and the assessee cannot normally be brought on the scene. At page 21 of the paper book is a copy of some sort of a show cause notice from the Delhi Municipal Corporation to M/s. Kapoor Sons & Co. and in terms of the contents of the said notice no demand was seen to have been raised. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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