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TMI Blog1981 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on installation of electrical stand-by line as a permissible deduction u/s 37(1) of the IT Act, 1961. (2) The ld. CIT(A) ought to have upheld the ITO's decision treating the expenditure of Rs. 62,417 as capital expenditure. 2. The assessee incurred total expenditure of Rs. 62,417 for installation of stand-by line which it obtained from the Gujarat Electricity Board. Before the ITO the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the other hand, on behalf of the assessee reliance had been placed on the decision in the case of Empire Jute Co. Ltd. vs. CIT (1980) 17 CTR (SC) 113 : (1980) 124 ITR 1 (SC). In that case the Supreme Court observed that "it is not every advantage of enduring nature acquired by the assessee that brings the case within the principle laid down in this test....... If the advantage consists mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expediency for augmenting profitability and was, therefore, revenue expenditure. 6. In the present case the assessee has supplied to us a copy of the agreement with the Gujarat Electricity Board. On perusal of para 5(b) of the agreement, it is seen that it was the duty of the assessee to complete all arrangements for receiving supply of electricity from the Electricity Board. It appears that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement shall determine, but without prejudice to the rights and liabilities of the parties in respect of any matter antecedent to such determination." 7. This clause shows that the agreement itself was not of enduring nature or even of a long term nature. That being the position, it cannot be said that the purpose of installation of the material brought from the aforesaid firms was of an endu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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