Annual lease payment for asset transfer treated as consideration, not capital expenditure, on the facts found.

Annual lease payment made in lieu of transfer of assets was treated as consideration linked to the transfer and not as capital expenditure. The record showed payment of goodwill and no amount apart from the annual lease money for the asset transfer; on those facts, the Tribunal's view that the payment was not a capital outlay was held to be a possible view and not contrary to law. The question was answered against the Revenue and in favour of the assessee.

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Issues: Whether the annual lease payment of Rs. 5,000 made in lieu of transfer of assets was a capital expenditure.

Analysis: The assessee had paid Rs. 1 lakh as goodwill and the record did not show any payment other than the annual lease money for transfer of assets. On the facts found, the annual lease payment was treated as consideration in relation to transfer of assets and not as a capital outlay. The view taken by the Tribunal was held to be a possible view and not contrary to law.

Conclusion: The annual lease payment was not held to be an expense of capital nature; the question was answered against the Revenue and in favour of the assessee.

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