A.N.GROVER, J.

(1) THIS is an appeal by special leave from the judgment of Calcutta High court refusing to require the Income-tax Appellate jornal to state the case and to refer to it certain questions of law which claimed arose from the order of the tribunal, dated 13/03/1964, to the assessment year 1954-55.

(2) THE respondent-company was engaged during the previous year on 31/12/1953, relevant to the assessment year 1954-55 in and dealing therein. Madan Lal was one of the directors of company. He had taken for himself a lease of mining rights of village Gadi Majladih in the district of Hazaribagh for a period of 15 years from 1/04/1928. The lease was to expire on 31/03/1943. According to the terms of the lease the lessee had the option of renewal for a further period of 20 years on the expiry thereof. Madanlal gave a sub-lease of the mining rights to the respondent-company with the same covenants for renewal for alike period. On the expiry of the lease on 1/04/1943, the lessee refused to renew the lease. Madanlal filed a suit on 15/04/1953, for specific performance of the contract. The suit was dismissed by the learned subordinate Judge but during the pendency of the appeal to the High court a Compromise was entered into. The respondent-company was a party to the appeal as also to the compromise. According to the compromise the lease was to be renewed with retrospective effect from 1/04/1943. The respondent-company had to pay the rent from April 1, 19/03/1953. This amount came to Rs. 42,473.00 which was paid during the Previous year in question as rent for the aforesaid period. The respondent conmpany claimed a deduction in the sum of Rs. 42,473.00 on the ground that it was revenue expenditure and was deductible in the computation of its income for the assessment year 1954-55. The Incometax Officer did not allow the claim. The Appellate Assistant Commissioner allowed only a part of the claim to the extent of Rs. 2,341.00, being the rent payable for one year. According to him, the balance of the rent which had been paid was relatable to the period prior to the said previous year and therefore, it was not deductible. The Income-tax Appellate tribunal qf appeal held that the entire amount of Rs. 42,473.00 was deductible as reverfl expenditure from the business profits of the respondent for the aforesaid assessment year. The tribunal was of the view that after the expiry of the lease on 1/04/1943, and the refusal of the lessor to renew the same the respondent was in the position of a trespasser particularly after the dismissal of the suit for specific performance by the trial court. Until the suit was compromised in the High court in 1953 it could not be said that the respondents liability had become ascertained. In other words, it was only as a result of the compromise in the year 1953, that the respondent became entitled to remain in possession of the land on payment of reat The payment of the sum of Rs. 42,473.00 thus represented revenue expenditur by the respondent.

(3) THE Commissioner of Income-tax applied to the tribunal to state the case and refer the following question of law:

" Whether, on the facts and in the circumstances of the case, the sum of Rs. 40,132.00 was payment of a revenue nature and, as such, allowable j deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922 ? "

(4) THE tribunal dismissed the application for reference. The High court also did not accede to the prayer of the present appellant to direct the a case be submitted and the aforesaid question be referred.

(5) IN our judgment the High court was justified in refusing to direct the Appellate tribunal to state the case and refer the question which was sought to be referred. It was perfectly clear that the amount which have been paid by the respondent was an expenditure which was wholly a exclusively incurred for the purpose of carrying on its business. If the compromise had not taken