1987 (3) TMI 46

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....CHA J.-This is an application made by the Revenue under section 256(2) of the Income-tax Act, 1961. Rule has been issued only in regard to the first proposed question. It reads thus : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the expenditure of Rs. 2,29,258 incurred by the assessee in replacing petrol engines with diesel engi....

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....e Tribunal held that the boats might have required repairs and hence the expenditure of Rs. 1,55,448 was allowable as revenue expenditure. The Kerala High Court, on reference, took a different view. It found that there was no material before the Tribunal to show that the boats had become uneconomic in operation or that the engines were defective. By the mere use of the boats for about four years, ....

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....1955] 27 ITR 34. The Supreme Court observed that the aim and object of the expenditure would determine its character, namely, whether it was capital expenditure or revenue expenditure. If the expenditure was made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it was properly attributable to capital and was of the nature of capital expenditu....