9911796707
Advanced Search 
TMI Blog1969 (7) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 256(1) of the Income-tax Act, 1951: " Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the compensation paid to ex-operators for taking over their bus routes was expenditure of capital nature?" The facts, on the basis of which the reference has been made, have been very clearly put in paragraph 2 of the order of reference. The relevant assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee years and the amount paid has been mentioned in the order of reference. The amount so paid by way of compensation was claimed by the assessee-company as amounting to "revenue expenditure" and accordingly deduction was sought under section 10(2)(xv) of the Income-tax Act, 1922. This amount was consistently disallowed by the department up to the stage of the Tribunal and accordingly the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marcate the field between the two types of expenditure, capital and revenue. It would depend upon the facts and circumstances of each case. One test is however clear, that is, if the expenditure relates to the domain of running the business concern, then, ordinarily, it would be revenue expenditure. If, on the other hand, the expenditure is made to acquire a certain business to free the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case. The assessee-company acquired the unexpired permits and thereby got rid of competition from private operators who were on the field prior to the acquisition. The investment was clearly one of a capital nature. The Tribunal correctly answered the question of law. We would accordingly answer the question referred by saying that the expenditure was of a capital nature. That being th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
