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TMI Blog1986 (7) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... m named Vibgyor of New Delhi for a sum of Rs. 75,000 for getting the above work executed and for making of some furniture. The expenditure of Rs. 75,000 was allocated by the assessee as follows : Rs . (1) Cost of making partition, wooden panelling, false ceiling, painting and white-washing, etc. 60,990 (2) Cost of furniture 14,010 ------ Total 75,000 ------ Besides the expenditure of Rs. 60,990 allocated as above, the assessee incurred a further expenditure of nearly Rs. 1,000 on cost of plywood painting, lights, labour charges, miscellaneous material and table making charges. In all an expenditure of Rs. 61,982 was claimed to be expenditure of revenue nature. The ITO held following the decision of the Hon'ble Delhi High Court in the case of Hotel Diplomat v. CIT [1980] 125 ITR 781 that expenditure incurred by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 130 ITR 385 (Mad.), Girdhari Dass Sons v. CIT [1976] 105 ITR 339 (All.), CIT v. J.K. Industries (P.) Ltd. [1980] 125 ITR 218 (Cal.) and CIT v. Mehta Transport Co. [1986] 160 ITR 35 (Guj.), in support of his contentions. He has also placed reliance on certain decisions of the Tribunal, copies of which have been furnished as part of the paper book. Referring to the provisions of section 32(1A), Mr. Batra submits that those provisions relate to the grant of depreciation on capital expenditure incurred by the occupant of any premises taken on lease or on rent. According to him, those provisions do not in any way stand in the way of the assessee's claim because the latter had not, while incurring the expenditure in question, made, any extension or improvement in the building or on the construction of any ' pakka' structure. 5. We have considered the rival submissions. Since according to us, the question raised in the departmental appeal is primarily a question of fact, we have minutely examined the details of expenses incurred by the assessee in the premises taken on lease. We find that the expenditure had, in fact, been incurred on making partitions of teak commercial ply and on p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by their Lordships as follows: "There may be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, nonetheless, be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principle laid down in this test. What is material to consider is the nature of the advantage in a commercial 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." In the decision of the Hon'ble Allahabad High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtension or improvement to the building. According to the Tribunal, the provisions of section 32(1A) did not in any way stand in the way of that assessee's claim. 8. After instructing ourselves with the law laid down in the abovementioned cases and after looking, in particular, to the law laid down by the Hon'ble Supreme Court in the case of Empire Jute Co. Ltd. and after once again carefully going through the details of expenses, we are of the view that the expenditure claimed was an allowable business expenditure which was incurred in order that the assessee's profession could be carried on with greater facility and efficiency. Even though the advantage obtained by the assessee in bifurcating the office space into convenient wooden cabins might endure during the period of lease of five years or any extended period of lease, it could not be said to have resulted in incurring of an expenditure in the capital field. The expenditure which was incurred by the assessee on properly utilising the office space and on facilitating the assessee's professional activities was nothing, but a part of the assessee's working expenses or expenses incurred wholly and exclusively for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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