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TMI Blog2002 (4) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... all asset or advantage for the enduring benefit of the business, it was properly attributable to capital and was of the nature of capital expenditure. If, on the other hand, it was made for running the business or working it with a view to produce profits, it was revenue expenditure." - In our view no referable question of law has arisen from the order of the Tribunal. The finding of the Income-tax Appellate Tribunal is purely a finding of fact - - - - - Dated:- 22-4-2002 - Judge(s) : N. N. MATHUR., D. N. JOSHI. JUDGMENT The judgment of the court was delivered by N.N. MATHUR J.-The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has under section 256(1) of the Income-tax Act, 1961, referred the following question of law for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount to Rs. 5,30,503. In the opinion of the Commissioner of Income-tax (Appeals), the following expenditure was of capital nature: Rs. (a) Four hand made woollen carpets 2,24,280 (b) 50 Banquet tables (folding) 57,500 (c) 8 room mattresses 5,366 (d) 2 hand-knitted woollen carpets 50,670 (e) 15 items of furniture 35,600 (f) Miscellaneous furniture 30,778 (g) Lamp shades 11,950 (h) Partition panels 14,616 (i) Partition articles 41,343 (j) 12 decorative brass lamps 37,400 (k) 20 Galichas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the discussion in para. No. 12. Thus, in fact there was no occasion for the Income-tax Appellate Tribunal to make the instant reference. Be that as it may, from the question referred, it is clear that what has to be determined in the instant case is as to whether, on the facts and circumstances disclosed and the findings of the Tribunal, the expenditure incurred by the assessee-company for the purpose of modernisation falls in the category of revenue expenditure" or "capital expenditure". It is submitted by Mr. Bhandawat, learned counsel for the Revenue, that the expenditure which is made once for all for procuring an enduring benefit to the business clearly falls in the category of capital expenditure. It is further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Vanaja Textiles Ltd. v. CIT [1994] 208 ITR 161 (Ker). We have scanned through the cases referred to by learned counsel for the Department as well as for the assessee. Section 37 of the Income-tax Act provides for deduction of any expenditure not being in the nature of capital expenditure laid out or expended wholly and exclusively for the purposes of the business or profession. But the expression "capital expenditure" is not defined in the Act and the words employed under section 37(l) "in the nature of capital expenditure", make the meaning of the expression more elastic in application to the facts of each case. The word "capital" connotes permanency and "capital expenditure" is, therefore, closely akin to the concept of securing so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsists 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 Supreme Court in Bombay Steam Navigation Co. (1953) Pvt. Ltd. v. CIT [1065] 56 ITR 52, has held that an expenditure made under a transaction which is so closely related to the business that it could be viewed as an integral part of the conduct of the business, may be regarded as revenue expenditure laid out wholly and exclusively for the purposes of the business. It is contended by Mr. Bhandawat that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of old and worn-out hinges, putting frosted glass in the pink hall, putting decorated mirrors and pictures of religious personages in the dinning-cum-lecture hall etc. The court held that the expenditure was incurred with a view to beautify the premises to attract guests. Thus, the expenses cannot said to be of enduring nature. The question whether the expenditure was capital or revenue in the particular facts of the case is laid down in a large number of judicial decisions by the apex court and different High Courts. However, we are of the view that ordinarily it is essentially a question of fact. The law which the apex court laid down in Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 still holds good, which is extracted as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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