JUDGMENT

SINGH, J.:— This appeal is directed against the judgment and order of the High Court of Rajasthan dated 24-4-1975 (reported in 1976 Tax LR 30) answering the question referred to it by the Income-tax Appellate Tribunal in the negative, in favour of the Revenue and against the assessee. The question referred to the High Court was as under (at p. 31 of Tax LR).:

"Whether on the facts of and in the circumstances of the case, the Tribunal was right in holding that the payment of Rs. 3 lakhs to the Northern Railway was a revenue expenditure and was a deduction allowable under the Income-tax Act, 1961?"

The circumstances leading to the reference and the appeal are necessary to be stated. The natural Science (India) Ltd. predecessor-in interest of the assessee acquired a lease from the Maharaja of the erstwhile Bikaner State on September 29, 1948 for mining of gypsum for a period of 20 years over an area of 4.27 square miles at Jamsar. The lease was liable to be renewed after expiring of 20 years. The Natural Science (India) Ltd. by a deed of assignment dated December 11, 1948 assigned the rights under the lease to the Bikaner Gypsums Ltd, a company wherein the State Government owne