Revenue expenditure for setting up a new unit upheld as allowable where prior binding decisions had already settled the issue.

Expenditure incurred for setting up a new unit was treated as allowable revenue expenditure because the issue had already been covered by earlier decisions between the same parties for prior assessment years. Those binding decisions meant the controversy did not survive for reconsideration in the reference, and the referred question was answered in favour of the assessee. The operative result was that the expenditure was allowed as revenue in nature.

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Issues: Whether expenditure incurred for setting up a new unit was allowable as revenue expenditure.

Analysis: The question stood covered by earlier decisions between the same parties for prior assessment years. In view of those binding decisions, the controversy no longer survived for reconsideration in the present reference.

Conclusion: The referred question was answered in the affirmative and in favour of the assessee. The expenditure was held allowable as revenue expenditure.

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