1989 (2) TMI 32

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on is referred to the court for an answer under sub-section (1) of section 256 of the Income-tax Act, 1961. "Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 45,149 incurred by the assessee for installation of a new power line and equipment can, in law, be regarded as an expenditure allowable under section 37 of the Income-tax Act, 1961 ?"' Makhan Sarmah Sav....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....penditure facilitated the supply of energy to run the factory unit of the assessee, and, therefore, allowed the appeal. It is in these circumstances, at the instance of the Revenue under sub-section (1) of section 256 of the Act, that the above question is referred to this court. Whether an expenditure is capital or revenue, after numerous exercises by the Supreme Court in India, it was accepte....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... endurance at all'." The enduring benefit test was further elucidated holding (at p. 10) "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 of revenue account, even though the a....