Commercial expediency governs deduction of lease rent for idle equipment when expenditure is bona fide and business-related.

Lease rent paid for idle dozers was allowable as business expenditure because the transaction was bona fide, not shown to be sham or a diversion to a related concern, and was incurred for the assessee's iron ore business. The relevant test is commercial expediency, and reasonableness must be assessed from the businessman's standpoint rather than the Revenue's view of prudence. The tax authority could not disallow the expense merely because it considered the business decision imprudent, so the expenditure remained deductible.

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Issues: Whether lease rental paid for three idle dozers was allowable as business expenditure, or whether the Assessing Officer could disallow it on the ground that the business decision was imprudent.

Analysis: The expenditure was incurred for the assessee's business of extraction and sale of iron ore, and the leasing transaction itself was not shown to be sham, non-bona fide, or a diversion of funds to a related concern. The relevant test is commercial expediency, and the reasonableness of the expenditure must be judged from the standpoint of the businessman, not the Revenue. The Revenue cannot substitute its own view of prudence for the assessee's business decision, so long as the expenditure is bona fide and incurred for business purposes.

Conclusion: The lease rent was allowable as business expenditure, and the Revenue's challenge failed.

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