Capital expenditure cannot be recast as revenue expenditure when the payments are tied to acquisition of a capital asset.

Amounts found by the Tribunal to be relatable to acquisition of a capital asset could not be treated as capital expenditure converted into revenue expenditure, because that factual finding left no basis for such conversion. The earlier decision in Travancore Sugars and Chemicals Ltd. was inapplicable since it concerned a different question and payments of a nature that excluded any connection with the capital sum. On that basis, the issue was answered against the assessee and the Tribunal's deletion was not sustainable on the ground urged.

---

---

Issues: Whether the amounts deleted by the Tribunal could be treated as capital expenditure converted into revenue expenditure, and whether the earlier decision in Travancore Sugars and Chemicals Ltd. governed the case.

Analysis: The Tribunal had found as a fact that the amounts in dispute were relatable to the acquisition of a capital asset. On that factual finding, the question of converting such expenditure into revenue expenditure did not arise. The earlier decision relied upon was held inapplicable because the question framed there was different and the nature of the payments in that case excluded any connection with the capital sum.

Conclusion: The issue was answered against the assessee and in favour of the Revenue. The Tribunal's deletion could not be sustained on the basis urged.

---