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TMI Blog1969 (9) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-58. The relevant previous years ended on June 30, 1954, and June 30, 1955, respectively. During the two accounting periods the assessee-company paid two sums of Rs. 40,000 and Rs. 3,000 as contribution to the Cane Central Roads Development Fund. The assessee claimed these two amounts as deduction under section 10(2)(xv) of the Act. The claim was disallowed by the Income-tax Officer. This decision was upheld in appeal by the Appellate Assistant Commissioner and by the Appellate Tribunal. At the request of the assessee, the Tribunal has referred the following question of law to this court: " Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 40,000 in the assessment year 1956-57 and Rs. 3,000 in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness or working it with a view to produce the profits it is a revenue expenditure. If any such asset or advantage for the enduring benefit of the business is thus acquired or brought into existence it would be immaterial whether the source of the payment was the capital or the income of the concern or whether the payment was made once and for all or was made periodically. The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure." We now proceed to apply that test to the present case. In order to decide whether the two payments for the two assessment years were in the nature of capital expenditure or revenue expenditure it is necessary to ascertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pproach road from the main road to the premises of the factory. That road belonged to the Government of West Bengal. The approach road fell into disrepair, and began to cause transport difficulties to the assessee. Government was not prepared to meet the expenses for repairing the road. The assessee thereupon offered to contribute a sum of Rs. 39,770 for improvement of the approach road. It was held that the money was spent not so much to bring about any asset or advantage of enduring benefit to itself but to run the business efficiently and conveniently. Expenditure was allowable expenses under section 10(2)(xv) of the Act. There is much resemblance between the facts of the present case and the facts in Commissioner of Income-tax v. Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X
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