1935 (12) TMI 33

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..... ations to and adjustments and repairs of the equipment; that at the expiration of the agreement the machine was to be handed back to the company; and that the machine would remain at all times the sole and exclusive property of the company throughout the ten years, and at the termination of the agreement. For the purposes of this reference these are the essential parts of the agreement. The payments were to be in the first year, of ₹ 41,856, and thereafter payment by the assessee to the company of ₹ 4,800 a year, in addition to an initial payment of ₹ 10,950. For the year under assessment 1932-33 the cinema made a net profit, according to the Commissioner, of ₹ 54,000 odd. This was arrived at, however, without taking .....

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..... , who appears for the Commissioner, that there are cases where the sum paid nominally for rent could be dissected and a conclusion arrived at whether the payment, or what portion of it, is capital or revenue. But to arrive at a conclusion of that nature, the Court must be in possession of the fact. The only evidence before us is this agreement which, as we have pointed out, prima facie shows that there was no difference between this agreement for lease and any other agreement for lease. The mere fact that the lessor takes, as in this case, half the total rent in one year, the rest of the rent being spread over nine years, gives us no information upon which we can come to any conclusion as to whether the first payment is in the nature of a p .....

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..... l have no further useful life (which I would state as fact is expected to end long before the term of ten years). There is not only no evidence on this before us but strong evidence to the contrary. If it has no useful life before ten years have passed, the agreement itself would be sheet waste paper. We are clear therefore that in this reference there are no facts upon which we can come to any conclusion upon the matter. The same applies to the second question put to us. The only fact which is placed before us is that the article is a projector. There is no information as to what machinery, if any, is in the projector. Does it contain a dynamo or a converter ? It may be the Income Tax Commissioner knows, but we certainly do not. In .....

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