Judgment

HEGDE, J.: This appeal arises from the decision of the High Court of Patna in a reference under S. 66 (1) of the Indian Income-tax Act,1922 (to be hereinafter referred to as the Act). In that reference several questions of law were referred to the High Court for its opinion. In this appeal we are concerned with only one of those questions and that question is:

"Whether on the facts and circumstances of the case the Tribunal was justified in holding that litigation expenses of Rs.1,29,994/- incurred by the assessee for the assessment year 1951-52 constitute expenditure laid out wholly and exclusively for the purpose of the assessee s business?"

2. The relevant facts as found by the tribunal may now be briefly stated. The litigation expenses in question relate to the protracted litigation in respect of Murli Hills. Those Hills were owned by the State of Bihar. On April 1, 1928, the State Government gave a lease of those Hills to Kutchwar Lime Company for 20 years for the purpose of quarrying limestone therein. In the lease deed entered into between the parties, there was a clause preventing the lessee from assigning its rights to any third party without the consent of the less