1977 (8) TMI 18

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....U J.-The question referred by the Income-tax Appellate Tribunal is : " Whether, on the facts and in the circumstances of the case, the payment made to Mr. Jeen Roy, or any part of it, could be treated as capital in nature ?" The assessee is a private limited company established for the production of wines. The assessee appointed one Mr. Jeen Roy of France, for rendering necessary help in set....

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....ncome-tax Appellate Tribunal allowed the appeal by holding that both the said items would come as revenue expenditure, and not as capital expenditure. Hence, this reference at the instance of the department. It is the contention of the department, that, by means of the expenditure incurred, the assessee got an advantage of an enduring nature and, therefore, it is a capital expenditure. The expe....

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.... it is capital in nature as, till then, it cannot be said that there was any business transaction. But, as regards the amount incurred subsequent to April 3, 1968, on which date the production and business of the assessee started, there is no clear evidence that by incurring that expenditure on Mr. Roy, the assessee got an advantage of an enduring nature. It is, therefore, not possible to say that....