TaxTMI 
TaxTMI 
TaxTMI 
2004 (12) TMI 50
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....heatre, stamp duty, interest payment, etc., as an admissible deduction as revenue expenditure?" The assessment year is 1976-77 and the relevant accounting period is S. Y. 2031. The assessee, a registered firm, carried on business of exhibiting cinema films. During the accounting period expenditure to the tune of Rs. 2,17,285 was claimed under the head "Theatre renovation and repairing expenses". The assessee also claimed expenditure on account of stamp duty, interest, etc. amounting to Rs. 32,221. The Assessing Officer held that the aforesaid expenditure did not amount to revenue expenditure and was capital in nature as it brought into existence an advantage of enduring nature. The assessee carried the matter in appeal before the Commissi....
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.... the assessee is not an owner of the premises and there was no long lease in favour of the assessee such an assessee does not obtain an enduring benefit as a result of expenditure incurred on partition walls, show-windows, etc. Sixthly, expenditure incurred on repairs for proper upkeep of a picture house is said to have been incurred on the ground of commercial expediency and in the course of ordinary commercial trading activity of the assessee such an expenditure was allowable as a business expenditure. Lastly, the test of enduring benefit is not necessarily a conclusive test to be applied blindly and mechanically without regard to the particular facts and circumstances of a given case and that whether the expenditure is on capital accou....
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....d circumstances of the case. In support of the submission she placed reliance on a decision of CIT v. Shri Digvijay Cement Company Ltd. [1986] 159 ITR 253 (Guj). Though served, there is no appearance on behalf of the respondent-assessee. In the case of CIT v. Mehta Transport Co. [1986] 160 ITR 35, this court was called upon to decide as to whether the expenditure incurred by the assessee before it on construction of a loft in rented premises was revenue in nature or not. The assessee therein had taken shop premises consisting of ground floor admeasuring 450 sq. ft. on lease and in the said premises it constructed a loft admeasuring about 350 sq. ft. The court after referring to various decisions summarised the enunciated law in the follow....
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.... the sense that the advantage which would be obtained would last for ever. In certain circumstances, this test of bringing into existence an advantage of enduring nature may not serve the purpose. There may be cases where expenses, even if resulting in the advantage of an enduring benefit, may be properly chargeable to revenue account if the advantage consists merely in facilitating the assessee's trading operations, or enabling him to manage and conduct his business more efficiently or more profitably while leaving the fixed capital untouched. If the outgoing or expenditure is so related to the carrying on or conduct of the business that it may be regarded as an integral part of the profit earning process, and not for acquisition of an ass....
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....ial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future. The test of enduring benefit is, therefore, not a certain or conclusive test and it cannot be applied blindly and mechanically without regard to the particular facts and circumstances of a given case." The Tribunal has found on the facts that: "9. We ....