JUDGMENT
T.D. Sugla, J.
1. In this reference relating to the assessee’s assessment for the assessment year 1971-72, the Income-tax Appellate Tribunal has, at the instance of the Department, referred to this court the following two questions as questions of law :
“(1) Whether, on the facts and in the circumstance of the case, the Tribunal was justified in holding that both in terms of the lease agreement dated April 23, 1940, between the assessee-company and the Government and under section 108 of the Transfer of Property Act, 1882, there existed during the relevant previous year, a liability on the company to restore the land leased to it to its original condition and that, therefore, the estimated liability for ‘restoration charges’ was an admissible revenue expenditure under section 37(1) of the Income-tax Act, 1961 ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the liability, if any, under the lease agreement towards ‘restoration charges’ was not a part of the price paid for acquiring the lease and did not, therefore, constitute capital expenditure ?”
2. It was pointed out by Shri Jetley, learned counsel for the Department, that two questions similar to the first two questions herein were referred to this court by the Tribunal in the assessee’s won case for the assessment years 1961-62 and 1962-63. The questions referred in that case were :
“(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that both in terms of the lease agreement dated April 23, 1940, between the assessee-company and the Government and under section 108 of the Transfer of Property Act, 1882, there existed during the relevant previous year, a liability on the company to restore the land leased to it to its original condition and that, therefore, the estimated liability for ‘restoration charges’ was an eligible revenue expenditure under section 37(1) ?
(ii) On the facts and in the circumstances of the case, whether the Tribunal was correct in law in holding that the liability, if any, under the lease agreement towards ‘restoration charges’ was not a part of the price paid for acquiring the lease and did not, therefore, constitute capital expenditure ?”
3. By our court’s judgment dated April 3, 1987, reported in CIT v. New India Mining Corporation (Pvt.) Ltd. (1987) 168 ITR 431, Shri Jetley stated, our court had held that there existed, during the relevant previous year, not liability on the assessee to restore the lands leased to it to their original condition, and, in that view of the matter, our court deemed it unnecessary to consider the further aspect of the first question, namely, as to whether the estimated liability was an eligible revenue expenditure, and the second question. Inviting our attention to the fact that references for subsequent assessment year have also been likewise answered in view of the above judgment, Shri Jetley argued that the questions in the present reference should also be answered accordingly.
4. Shri Dastur, learned counsel for the assessee, fairly admitted that our court had considered and answered the questions in the manner pointed out by Shri Jetley in CIT v. New India Mining Corporation (Pvt.) Ltd. (1987) 168 ITR 431. He, however, stated that the said judgment need not be followed for three reasons, viz., (i) the assessee has filed a special leave petition against the said judgment which is pending in the Supreme Court; (ii) the interpretation of clause 3 of the lease agreement dated April 23, 1940, in particular, requires reconsideration inasmuch as the interpretation placed on the clause by the earlier Bench of our court made certain expressions used in that clause otiose; and (iii) the previous year relevant to the assessment year 1971-72 ended on June 30, 1970. The lease agreement dated April 23, 1940, expired on April 22, 1970. A fresh lease agreement between the assessee and the Government of Maharashtra was executed on May 7, 1971, which is effective from April 23, 1970. The corresponding clause in the lease agreement dated May 7, 1971, it was argued, was materially different and at least for the period from April 23, 1970, to June 30, 1970, it was the lease agreement dated May 7, 1971, which was applicable.
5. Our court, Shri Dastur pointed out, had held that the words “during the period from the commencement of such occupation or use until the area shall cease to be so occupied or used and shall be restored to its original condition” set out the starting and terminal points of the period for which the rent was payable. He submitted that this interpretation was not quite correct inasmuch as the rent was payable during the operation of the period of lease and not until the land was restored to its original condition. In support of the third reason, Shri Dastur pointed out that clause 4 of the new lease deed clearly provided that the lessee shall, as far as possible, restore the surface land so used to its original condition.
6. In this context, Shri Dastur invited our attention to the observations of our court in the earlier judgment to the effect that it was impermissible to interpret any deed in the light of another deed, though it be between the same parties and in relation to the same subject-matter, but executed thirty years later and that it was equally impermissible to interpret the lease in the light of the pro forma of a similar lease that was not published until twenty years thereafter. He argued that these observations were not applicable in the present case as, at least for a part of the previous year, the new lease agreement was in force.
7. In reply, Shri Jetley submitted that the questions referred by the Tribunal in the present case refer to the lease agreement dated April 23, 1940. There is no material on record to show that the Tribunal was called upon or had considered the legal effect of the lease deed dated May 7, 1971. Not only that, the Tribunal has not referred any question as a question of law arising out of or in relation to the lease agreement dated May 7, 1971, the Tribunal could not also have done it inasmuch as such a lease deed was never considered by it. Both the parties, it was pointed out, had proceeded on the basis that the terms and conditions of lease agreement dated April 23, 1940, were applicable for the assessment year 1971-72 as well.
8. In our judgment, the three reasons given by Shri Dastur to persuade us to reconsider the whole matter once again require to be rejected. The fact that the assessee has filed a special leave petition which is pending admission in the Supreme Court is hardly relevant. The argument that the interpretation given by this court to the expressions used in clause 3 of the lease agreement dated April 23, 1940, provide two terminals during which rent is payable and casts no obligation on the assessee to restore the lands to their original condition makes some other words used in the clause meaningless is also to good to be accepted. In the first place, the argument is without any substance. In any event, if the special leave petition is admitted, it will be open to the assessee to take up this argument before the Supreme Court. So far as this court is concerned, the interpretation by our earlier Bench is binding on us which we respectfully follow.
9. The third argument, on the face of it, looks attractive and also has some substance. However, as pointed out by Shri Jetley, the Tribunal was not called upon to consider the legal effect of the new lease deed. The Tribunal has referred to this court the questions which are based on the lease agreement dated April 23, 1970. We might have thought of reframing the questions if we had found that the new lease deed was considered by the Tribunal. In the circumstances, we do not think it appropriate to answer the questions referred to us by the Tribunal with reference to the lease agreement dated May 7, 1971. All the same, the fact cannot be disputed that at least for the period from April 23, 1970, to June 30, 1970 (a part of the previous year), the assessee was governed by the new agreement and that the new lease agreement is not something which is placed before this court for the first time. Our court, in CIT v. New India Mining Corporation (Pvt.) Ltd. (1987) 168 ITR 431, has referred to the new lease agreement.
10. Having regard to the above discussion, we hold that the assessee was under no obligation under the lease agreement dated April 23, 1940, and under section 108 of the Transfer of Property Act to restore that land leased to it to its original condition and that, therefore, the question of any liability for restoration charges on estimate being allowed as revenue expenditure under section 37(1) of the Income-tax Act, 1961, would not arise. Accordingly, the first question is answered in the negative and in favour of the Revenue. In that view of the matter, it is not necessary to answer question No. 2.
11. Needless to mention, while giving effect to our judgment under sect saction 260(1) of the Income-tax Act, 1961, the Tribunal will consider whether and to what extent the assessee is under an obligation to restore the land leased to it to its original condition in terms of the new lease agreement dated May 7, 1971, and if so, whether and to what extent to restoration charges on estimate can be allowed as revenue expenditure.
12. No order as to costs.