9911796707
TMI Blog1979 (2) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... " The question really was whether the sum of Rs. 50,000 paid by the assessee in that case was a revenue or capital expenditure. We referred to the observations of Lord Cave in the case of Atherton v. British Insulated & Helsby Cables Ltd. [1925] 10 TC 155; [1926] AC 205 (HL). We also referred to the decision of the Supreme Court in the case of Indian Molasses Co. (P.) Ltd. v. CIT [1959] 37 ITR 66. All these principles were reviewed by the Supreme Court in the case of Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 and there the Supreme Court laid down certain principles which are applicable for determining the question whether a particular expenditure was a capital or revenue. Whether a particular expenditure in a particular situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined by the expenditure incurred, and, secondly, the nature and the manner of the payment made. It is the real nature and quality of payment that is important. " According to Dr. Pal, the second aspect, to which we had referred, namely, the nature and manner of payment was a test not warranted by the tests laid down by the Supreme Court. But if the aforesaid observations are read in the context of the facts of this case where we bad observed as follows : " It is true that if the annual sums had to be spent for meeting the workers' expenses for treatment at the hospital, the same would have merited deductions as revenue expenditure. From that point of view, it is true that by incurring this expenditure of Rs. 50,000 the company was getting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee-company. It has also to be borne in mind that this was an initial payment or payment to get the scheme started." Then it appears that the second test to which Dr. Pal had referred, was not a new test. Whether a payment was made in lump or in one instalment is also a relevant factor as has been-emphasised by the Supreme Court in the several decisions and the tests laid down by the Supreme Court. Dr. Pal submitted that several other High Courts more or less in similar circumstances had taken a different view of the matter. For instance, Dr. Pal drew our attention to the decisions of the Orissa High Court in the case of CIT v. Rupsa Rice Mill [1976] 104 ITR 249, where at page 255 of the report, the Division Bench of the Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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