Capital expenditure for eliminating competition and enduring advantage cannot be claimed as revenue expense; fact findings supported by evidence are not referable.

Payment made at the outset to remove a competitor and secure exclusive access to a business was treated as capital expenditure because it created an enduring business advantage rather than meeting ordinary running expenses. The assessee therefore could not claim it as revenue expenditure. On the separate question of the eleven annas share in the Jaipuria firm, the Tribunal's view that the interest belonged to the Hindu undivided family and not to Chuni Lal personally was held to be a finding of fact supported by evidence, so it did not raise a referable question of law. No referable question arose on either issue, and reference jurisdiction was unavailable.

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Issues: (i) Whether the payment of Rs. 40,000 to a competitor to secure exclusive access to the armour plates business was capital expenditure or revenue expenditure; (ii) whether the finding that the eleven annas share in the Jaipuria firm belonged to the Hindu undivided family and not to Chuni Lal individually raised any referable question of law.

Issue (i): Whether the payment of Rs. 40,000 to a competitor to secure exclusive access to the armour plates business was capital expenditure or revenue expenditure.

Analysis: The amount was paid at the outset to remove a rival from competition and to prepare the ground for securing the business. It was not paid for the acquisition of stock-in-trade, nor was it part of the price of any goods purchased from the commission. The expenditure therefore related to the acquisition of an enduring business advantage rather than to the ordinary running of the business.

Conclusion: The payment was capital expenditure and not revenue expenditure, and the assessee was not entitled to reference on that point.

Issue (ii): Whether the finding that the eleven annas share in the Jaipuria firm belonged to the Hindu undivided family and not to Chuni Lal individually raised any referable question of law.

Analysis: The Tribunal's conclusion rested on material on record and was a finding of fact. Interference was permissible only if there was no evidence to support the finding or if no reasonable tribunal could have reached it. The record showed evidence supporting the view that the family firm, and not Chuni Lal personally, was the real partner. The contention that the Tribunal had ignored material was rejected as the relevant matters had been considered at one stage or another.

Conclusion: The finding was one of fact supported by evidence and did not give rise to a question of law requiring reference.

Final Conclusion: No referable question arose on either issue, and the applications under section 66(2) were correctly refused.

Ratio Decidendi: Expenditure incurred to eliminate competition and secure an enduring business advantage is capital in nature, and a finding of fact supported by evidence cannot be reopened in reference jurisdiction merely because a different inference is possible.

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