Revenue expenditure on tenant-made business premises improvements was allowable because no capital asset or enduring benefit arose.

Expenditure incurred by a tenant for constructing a bedding for an oil engine and a room for storing cloth in rented business premises was treated as revenue expenditure because the tenant did not acquire any capital asset and the structures became part of the landlord's premises. The outlay was incurred wholly for the purposes of carrying on the business and did not give the assessee an enduring benefit of a capital nature. It was therefore allowable as business expenditure in favour of the assessee.

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Issues: Whether expenditure incurred by a tenant on construction of a bedding for an oil engine and a room for storing cloth in rented business premises was capital expenditure or allowable revenue expenditure.

Analysis: The assessee was only a tenant and the constructions made in the rented premises did not result in acquisition of any capital asset by the assessee. The structures became part of the landlord's premises, and the expenditure was incurred wholly for the purposes of carrying on the business. On these facts, the outlay did not confer an enduring benefit of a capital nature on the assessee.

Conclusion: The expenditure was held to be revenue in nature and allowable as business expenditure, in favour of the assessee.

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