JUDGMENT
1. At the instance of the assessee, the Income-tax Appellate Tribunal, (Allahabad Bench), referred the following questions relating to the assessment year 1986-87 for the opinion of this court :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the claim of the assessee for exemption under Section 10(26B) of the Income-tax Act, 1961 ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in coming to the decision that the assessee was not entitled to exemption under Section 10(20A) of the Income-tax Act, 1961 ?
3. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in rejecting the claim of the assessee for relief under Section 80J of the Income-tax Act, 1961 ?
4. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in disallowing the expenditure of Rs. 15,872 ?
5. Whether, on the facts and in the circumstances of the case, the expenditure aggregating Rs. 15,872 could justifiably be held to be of capital nature and not of revenue nature ?"
2. Sri G.C. Sharma, learned senior advocate, for the assessee, made a categorical statement at the Bar that he does not press questions Nos. 2 and 3 and, therefore, they are returned by us unanswered.
3. So far as question No. 1 is concerned, we have already decided this question in the case of the assessee relating to the assessment year 1979-80 that the assessee is entitled to exemption under Clause (26B) of Section 10 of the Income-tax Act, 1961 (briefly, "the Act"), only in respect of the income attributable to the housing schemes executed by the assessee under object No. 1 of its memorandum of association for the promotion of the interests of the members of the scheduled castes only and that exemption will not be available in respect of the activities, covered by main objects Nos. 2 to 5 of its memorandum of association.
4. Question No. 1, therefore, is partly answered in favour of the assessee.
5. Then come questions Nos. 4 and 5. The facts, in brief, are that a wall to wall carpet was purchased by the assessee for being used in the office and it claimed deduction of expenditure of Rs. 15,872 on that account. Under Section 37 of the Act any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purposes of the business or profession, is allowable. The authorities took the view that the asset acquired was of enduring nature and, therefore, that was in the nature of capital expenditure not allowable as deduction under Section 37 of the Act. This view was endorsed by the Appellate Tribunal. It is now well-settled as a result of numerous cases that none of the tests for distinguishing between capital and revenue expenditure is conclusive or of universal application. Periodic payments particularly those which are based on turnover of profit or which take the form of rent or licence fee and which are not related to any predetermined lump sum may be deductible as revenue expenditure, even if they are made for the initiation of a business or represent consideration for acquiring a capital asset or an advantage of enduring benefit to the business. It is not the law that in every case, if an enduring advantage is obtained, the expenditure for securing it must be treated as capital expenditure. Though advantage of enduring benefit is not a decisive test to distinguish between revenue expenditure and capital expenditure, on the facts and circumstances of this case, we see no legal infirmity in the view taken by the Appellate Tribunal and the departmental authorities. Expenditure incurred on the carpet has nothing to do with the augmenting, preserving or protecting the turnover or profits of the business and hence that was rightly held capital expenditure.
6. Questions Nos. 4 and 5 are, therefore, answered in the affirmative, i.e., against the assessee and in favour of the Revenue.
7. Let the record of this case be sent down to the Appellate Tribunal within fifteen days from today to enable the Appellate Tribunal to pass an order conformable to our order.