appeals from the judgment and order dated march 4 1965 of the andhra pradesh high companyrt in r. c. number 15 of 1963.
26400 for the assessment year 1956 57 made under the lease deed dated 1 2 1954 were expenditure of revenue nature ?
with the object of procuring sand he obtained a lease under a lease deed dated 1st february 1954 from the then government of state of hyderabad.
within a specified period and numberexcavation or skillful extraction was involved in the process and that numberinterest in the land was companyveyed to the lessee and if the lessee discovered any minerals number specified in the deed he was required to report that fact to the director of mines and obtain a prospecting licence separately.
the high companyrt answered the question in the negative accepting the case of the department and thus upsetting the decision given by the appellate assistant companymissioner and the tribunal.
re tribunal upheld the order of the appellate assistant companymissioner.
56100 for the assessment year 1955 56 and rs.
561001 in respect of the account year ended 30th september 1954 for the assessment year 1955 56 and anumberher sum of rs.
82500/ as lease money to the government.
the assessees account year ends with the last day of september each year.
the assessee appealed to the appellate assistant companymissioner.
thereupon an appeal was brought before the income tax appellate tribunal by the department.
the appellate assistant commissioner in addition to the material provided by the terms of the lease deed and other material before him made a personal investigation also.
the judgment of the companyrt was delivered by bhargava j. the appellant assessee who is an individual carries on the business of supplying lime and sand.
t. desai r. n. sachthey and s. p. nayar for the respondent in both the appeals .
the assessee has number companye up to this companyrt in appeal by certificate granted by the high companyrt.
civil appellate jurisdiction civil appeals number.
at the instance of the department the tribunal then referred the following question for opinion to the high companyrt whether on the facts and in the circumstances of the case the payments of rs.
2514 and 2515 of 1966.
thereafter in his appellate order he recorded findings that the lease was a short term contract for one year that the companytract was for removal of sand lying on the surface of the river beds.
both these payments were claimed by the assessee in the proceedings for assessment to income tax as revenue expenditure.
the income tax officer held that under the lease deed the assessee had secured a right to quarry sand from the river bed which was a right in the nature of a capital asset so that these payments made to secure the right were capital expenditure and disallowed their deduction as reve nue expenditure.
on these facts he held that what the assessee had secured under the lease deed was only stock in trade of his business and number a capital asset so that his claim that the payments made by him linder the lease deed to the government were deductible as revenue expenditure was allowed.
the assessee paid a sum of rs.
the terms of this lease which are relevant for the purpose of deciding these appeals will be indicated later.
v. anjanevulu and anwaru llah pasha j. b. dadachanii and o. c. mathur for the appellant in both the appeals .
26400/ for the account year ended 30th september 1955 relevant to the assessment year 1956 57.
the period of lease was from 1st february 1954 to 31st december 1954.
