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TMI Blog1969 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... landlord for the new building, Bombay-Agra Road, Indore ? " The case relates to the assessment year 1962-63, the account year being the period from 1st April, 1961, to 31st March, 1962. The assesses is a private limited company and is a distributor of Fiat Cars at Indore. It has to maintain a workshop and showroom for the purposes of its business. The principals of the assessee, the Premier Automobiles Ltd., wanted it to rent a modern showroom and workshop, as the then existing showroom and workshop were not suitable. To meet the demand of the principals the assessee entered into an agreement on 1st April, 1960, with M/s. Goolbanu Godrej and others (an association of persons and hereinafter referred to as the "landlords"), who owned a sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under section 30. As regards the rent payable for the building, the orders passed by the Income-tax Officer and the Appellate Assistant Commissioner were confirmed. On an application made by the assessee, the Tribunal referred to us the question of law that we have already set out. The facts found are that the association of persons constituting the landlords in the relevant year consisted of members who were all shareholders in the assessee-company ; they were all persons from the same family, the details of which are given in the order of the Appellate Assistant Commissioner, which forms part of the statement of the case. There was, therefore, virtual identity of interest between the landlords and share holders of the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of the business or profession, the following deductions shall be allowed- (a) Where the premises are occupied by the assessee- (i) as a tenant the rent paid for such premises ; and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs ; (ii) otherwise than as a tenant, the amount paid by him on account of current repairs to the premises ; (b) any sums paid on account of land revenue, local rates or municipal taxes ; (c) the amount of any premium paid in respect of insurance against risk of damage or destruction of the premises. " It would be seen that a deduction under section 30 in respect of rent for premises is admissible only if the premises are " used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been actually used, and this was enough to entitle the assessee to claim deduction under section 30. There is no substance in this contention. Even according to the facts alleged by the assessee (which have not been accepted), the building was not kept ready for use but was being made fit for use of business by installing machinery and furnishing it. It was never ready for use during the accounting year. When a building is being made fit for use, the building cannot be said to be in use either actively or passively. In Liquidators of Pursa Ltd. v Commissioner of Income-tax their Lordships while referring to clauses (v), (vi) and (vii) of section 10(2) of the 1922 Act, said thatthe words " used for the purposes of the business " mean used fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny expenditure of the nature described in sections 30 to 36. The section expressly says so. The nature of the expenditure is rent for premises, although it does not fulfil all the conditions on which it can be permitted as a deduction under section 30 ; its nature is the same as described in that section, and, therefore, it cannot be allowed under section 37. A different construction would nullify the conditions and limitations under which deductions are allowable under sections 30 to 36. As a result of the aforesaid discussion, we answer the question referred to us in the negative. The costs of this reference shall be paid by the assessee. Counsel's fee Rs. 150, if certified. Question answered its the negative. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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