1979 (2) TMI 57

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.... instance of the assessee the following two questions have been referred to us under s. 256(1) of the I.T. Act, 1961 : " (1) Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 7,000 incurred by the appellant in preparing the playground for the workers and members of the staff was a revenue expense permissible under sec. 37(1) of the Income-tax Act, 1961 ? 2. W....

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....he second question is, therefore, answered in the affirmative and in favour of the assessee. So far as the first question is concerned, the brief facts are that the assessee had incurred an expenditure of Rs. 7,000 for levelling land to be used as a playground by the workers and members of the staff of the assessee-company. This amount was held to be disallowable as revenue expenditure and the ....

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.... be said to have resulted except that the staff of the company was able to make use of the land. Having regard to the facts of the present case, we are inclined to take the view that the expenditure of the amount of Rs. 7,000 cannot be treated as capital expenditure. There is no evidence to show that any new construction in the form of a stadium or pavilion has been put up. All that is disclosed o....