1. This is a reference under s. 66(1) of the Indian IT Act. The reference seeks the answer of this Court to the following question: "Whether, on the facts and in the circumstances of the case, the sum of Rs. 24,498-12-6 incurred for repairs and renovation of the cinema hall and the sum of Rs. 9,890 incurred for legal expense could be allowed as expenses under any of the provisions of s. 10(2) of the Indian IT Act ?"

2. The assessee is the lessee of a cinema house belonging to one Jagannath Prosad Roy. Jagannath gave a lease on the 18th Feb., 1946, of the house along with machinery, furniture and other fixtures to one Mahendra Narayan Roy for a period of five years with an option to renew the lease for another five years. The interest of Mahendra Narayan Roy in the said property was sold on the 12th May, 1950, in auction sale on account of income-tax demands to the partners of the assessee-firm along with two other gentlemen, M/s Agarwalla and Advani. The sale was held under the Public Demands Recovery Act. A sale certificate was granted on the 21st June, 1951. Thereafter, on the 26th July, 1951, and the 30th Sept., 1951, the assessee purchased the interests of M/s Agarwalla