TMI Blog1984 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ee carried the matter in further appeal to the Income-tax Appellate Tribunal, Amritsar Bench. Before the Tribunal reliance was placed on a judgment of the Supreme Court in Bombay Steam Navigation Co. (1953) Private Limited v. CIT [1965] 56 ITR 52. In that case, revenue expenditure had been given the following definition (headnote): " In considering whether expenditure is revenue expenditure, the court has to consider the nature and the ordinary course of business and the objects for which the expenditure is incurred. The question whether particular expenditure is revenue expenditure incurred for the purpose of the business must be viewed in the larger context of business necessity or expediency. If the outgoing or expenditure is so relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir looms. The working time agreement also provided that no signatory shall work for more than 45 hours per week and that the signatories to the agreement shall be entitled to transfer any part or wholly, their allotment of hours of work per week to any one or more of the other signatories. Under this agreement, the assessee in that case had purchased " loom hours " from two other mills for an aggregate sum of Rs. 2,03,255. This amount was claimed is revenue expenditure. When this controversy came up before the Supreme Court, speaking for the Bench, Bhagwati J. observed (p. 12): " We are conscious that in law as in life, and particularly in the field of taxation law, analogies are apt to be deceptive and misleading, but in the present co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its concern. Such an expenditure could not be regarded as capital expenditure. In CIT v. Kanodia Cold Storage [1975] 100 ITR 155 (All), Hindustan Times Ltd. v. CIT [1980] 122 ITR 977 (Delhi), CIT v. Excel Industries Ltd. [1980] 122 ITR 995 (Bom), Sarabhai M. Chemicals Pvt. Ltd. v. CIT [1981] 127 ITR 74 (Guj) and CIT v. Gujarat Mineral Development Corporation [1981] 132 ITR 377 (Guj), the expenditure incurred for getting better electricity supply was held to be revenue in character. We are in respectful agreement with the view taken in these cases. For reasons afore-mentioned, we answer the question of law referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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