COMMISSIONER OF INCOME TAX Vs. SAKTHI TEXTILES LIMITED

JUDGEMENT

(1.) THE Tribunal has held that the expenditure incurred on the dust extraction plant installed by the assessee is to be treated as revenue expenditure, having due regard to the fact that the object of installation of the machine was to protect the health of the workers and that such machines have been installed as a welfare measure. THE assessee is engaged in the business of manufacture of textiles. THE dust extraction plant was meant to minimise the floating fluff arising from the operation of the carding machine thereby protecting the workers working in that area. THE fact that the assessee also received a benefit which could possibly be regarded as benefit in the capital field does not on that account render it capital expenditure. We are in agreement with the view expressed by the Tribunal. Though several tests including that of enduring benefit have been applied by courts to distinguish capital expenditure from revenue expenditure, none of the decisions have laid down that the tests are exhaustive or universal. As pointed out by the Supreme Court in the case of Gotan Lime Syndicate v. CIT , each case must depend on its own facts and a close similarity between one case and another is not enough and even a single significant detail may alter the entire aspect. THE most relevant aspect here is that the machine was installed to protect the health of the workmen as otherwise their health would have been injuriously affected by the dust arising from the operation of the carding machine. That is the primary object of the installation of machine and having regard to that object, the expenditure incurred on the installation of the machine must be regarded as revenue expenditure for promoting the health and welfare of the workmen. We, therefore, answer the question referred to us :

(2.) IN favour of the assessee and against the Revenue, and we hold that the expenditure so incurred by the assessee is revenue expenditure.