TMI Blog1979 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ature ? " The facts lie within a narrow compass and may be briefly stated : The assessee is a public limited company, trading in motor cars and running service stations. We are concerned in this reference with the assessment year 1963-64, the corresponding previous year being the year ended 31st March, 1963. In that year, the assessee opened two branches, one at Worli and the other at Dadar. At Worli, accommodation was taken under a lease which was to enure for a period of ten years. At Dadar, premises were similarly taken, but the period of the lease was a shorter one, viz., five years. Out of the amount of Rs. 21,657 mentioned in the question, a sum of Rs. 13,104 was paid to the lawyers who drew up the lease agreements and Rs. 8,553 pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself indicative of securing an asset of an enduring nature and the expenditure, therefore, was required to be disallowed as of a capital nature. In the opinion of the Tribunal, therefore, the expenditure was of a revenue nature and was liable to be allowed as a deduction. It may be mentioned in passing that the Commissioner had applied under s. 66(1) for a reference to the High Court. By its order dated 7th April, 1967, the Tribunal had declined to refer the question to the High Court on the ground that the same had become academic in view of the decision of the Supreme Court in India Cements Ltd. v. CIT [1966] 60 ITR 52. Thereafter, the Commissioner applied to the High Court under s. 66(2) and the High Court required the Tribunal to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hst Pharmaceuticals Ltd.'s case [1978] 113 ITR 877 (Bom) that the Tribunal had taken the correct view and allowed the expenditure as being expenditure of a revenue nature. In our opinion, merely because the period of the lease of the industry Manor premises in the instant case is one of ten years, it does not constitute such a startling difference as would appeal to us to apply a different test than the one which we applied in Hoechst Pharmaceuticals Ltd.'s case [1978] 113 ITR 877 (Bom). In our view,the expenses were rightly considered by the Tribunal as being of a revenue nature and on that footing deduction was rightly allowed. In this view of the matter,the question referred to us is answered in the affirmative and in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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