TMI Blog1989 (2) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961. "Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 45,149 incurred by the assessee for installation of a new power line and equipment can, in law, be regarded as an expenditure allowable under section 37 of the Income-tax Act, 1961 ?"' Makhan Sarmah Savapandit, the assessee, in this case, manufactures and sells tea. In the past, he privately gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, allowed the appeal. It is in these circumstances, at the instance of the Revenue under sub-section (1) of section 256 of the Act, that the above question is referred to this court. Whether an expenditure is capital or revenue, after numerous exercises by the Supreme Court in India, it was accepted in the case of CIT v. British India Corporation Ltd. [1987] 165 ITR 51, 56, "that no test of un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be of revenue account, even though the advantage may endure for an indefinite future". The test of enduring benefit was thus considered not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory efficiently. The fixed capital of the business is not touched. The question required to be answered is whether expenditure of Rs. 45,149 in such circumstances is capital expenditure. We see that the investment was made to run the factory efficiently. We hold in the facts of the case that the expenditure is of revenue nature and answer the question in the affirmative, in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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