Compromise payment for mining lease renewal treated as revenue expenditure deductible when incurred wholly for business purposes.

Payment made under a compromise to renew a mining lease was treated as revenue expenditure because it was incurred to secure continued possession of the demised land and to carry on mining operations. The liability became ascertained only on the compromise, and the expenditure was found to be wholly and exclusively for business purposes. Deductibility depended on the Tribunal's factual conclusion, which was supported by evidence, so no referable question of law arose for interference.

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Issues: Whether the amount paid pursuant to the compromise for renewal of the mining lease was revenue expenditure deductible in computing business income under section 10(2)(xv) of the Indian Income-tax Act, 1922.

Analysis: The payment was made to secure and continue the assessee's right to remain in possession of the demised land and to carry on mining operations. The liability became ascertained only on the compromise, and the expenditure was incurred wholly and exclusively for the purpose of the business. The allowance of such expenditure depended on the factual conclusion of the Tribunal, and there was evidence supporting that conclusion.

Conclusion: The amount was deductible as revenue expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922, and no referable question of law arose for interference under section 66(2).

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