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Judgment
Tulzapurkar, J.—In this reference made to this court u/s 66(2) of the Indian Income Tax Act, 1922, the following two questions have been referred to us for our opinion :
"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the income from the lease rent earned by the applicant from letting out the Strand Cinema was income assessable u/s 12 and not u/s 10 of the Indian Income Tax Act, 1922 ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in not allowing the item of Rs. 75,000 as expenditure of revenue nature ?"
The question which principally arises pertains to the item of Rs. 75,000 which has been incurred as an expenditure of the assessee-company in prosecuting certain winding-up petitions which had been preferred by several creditors of the lessee-company, viz., M/s. Western India Theatres Ltd. The Tribunal has recorded a finding that the assessee has not shown how it was necessary for it to take up winding-up proceedings or to finance proceedings taken out by third parties for winding up the lessee-company. In view of this finding which has been recorded question No. 2 will have to be answered in the affirmative and against the assessee. We answer accordingly.
In view of our answer to question No. 2, question No. 1 need not be answered.
There will be no order as to costs.