Judgment 1. IN this reference under section 66 (1) of the Income-tax Act, 1922 the short point to be decided is whether the expenditure incurred for securing loan under overdraft account is to be treated as revenue or capital expenditure. The assesses had incurred an expenditure of Rs.35,800/- for securing financial overdraft from a bank. The said amount comprised the following heads of expenditure; Rs.12,500/-paid to Manilal kothari as brokerage or commission for successfully negotiating with the bank for overdraft, Rs.11,500/-paid to M/s. Mackenzie Lyall and Co. and M/s. P. P. Shah as costs of valuation of the assets of the assesses to be hypothecated with the bank for overdraft, Rs.11,800/-cost of stamp purchase for deed of hypothecation. Rs.35,800/- 2. THE relevant year of assessment is the year 1952-53 and the corresponding previous year ended on December 31, 1951. The Income-tax Officer refused to allow the said expenditure of Rs.35,800/ - on the ground that it was capital in nature and, on appeal, the Appellate assistant Commissioner confirmed the order of the Income-tax Officer. On second appeal the Appellate tribunal held that the financial overdraft negotiated with the bank was definitely an advantage of an enduring character and, as such, it was capital in nature. The Tribunal, therefore, concluded that the said sum of Rs. 35,800/ - was incurred by the assesses to secure a capital asset and must, therefore, be regarded as the capital expenditure incurred once and for all. Thus the assessee's claim for deduction or allowance under section 10 (2) (xv) was rejected. On the facts and circumstances set out above the following question of law has been referred to this Hon'ble Court for opinion: "whether on the facts and circumstances of the case, the Tribunal was justified in holding that the sum of Rs. 35,800/- incurred by the assesses for the purpose of raising or securing overdraft facilities from the bank was an expenditure of a capital nature not allowable under section 10 (2) (xv) ?" Mr. S. R. Banerjee, learned counsel for the assesses has submitted before us that the said expenditure of Rs. 35,800/- has not been incurred for acquiring any asset or advantage of an enduring character and, as such, should have been allowed as deduction under section 10 (2) (xv. S. R. Banerjee, learned counsel for the assesses has submitted before us that the said expenditure of Rs. 35,800/- has not been incurred for acquiring any asset or advantage of an enduring character and, as such, should have been allowed as deduction under section 10 (2) (xv. He has urged the following grounds to substantiate his contention: (a) The true nature of overdraft facilities reveals that they comprise a short term loan repayable on demand, and they are incidental to the running of the company, and do not result in an advantage of an enduring character. He has relied upon a passage from Tannan's Banking Law and Practice (9th Edition) at page 259 to emphasis the fact that unlike cash credits which are long term loans, the overdraft facilities represent only short term loans repayable on demand. He has also referred us to Halsbury (Hailsham Edition) Vol. I, Art. 1388 and 1400 to show us that the intrinsic character of overdraft facilities secured by a deed of hypothecation, is repugnant to the concept of such loan being an asset or advantage of an enduring character. He has added that the true nature of such transaction has not been fully comprehended by the Income-tax authorities inasmuch as the Income-tax Officer has described the transaction as "financial overdraft arrangement", the Appellate assistant Commissioner as "bank overdraft representing capital loan", and the Tribunal as "advantage of an enduring character". (b) There are four primary facts which may be set out as follows: (i) The assesses is a joint stock public company carrying on industrial and manufacturing activities. (ii) The assesses has been incorporated in 1929. (iii) In 1950 the company has taken recourse to overdraft facilities. (iv) The loan has been secured as repayable on demand and on the basis of a deed of hypothecation. 3. ON these four basic facts the Income-tax authorities should not have found that the overdraft has secured an advantage of enduring character. The facts that the costs are not incurred as initial expenses in the year of incorporation of the company and that the loan under overdraft is based upon hypothecation of movables and repayable on demand reveal that the assessee cannot be said to have derived any advantage of an enduring character. The facts that the costs are not incurred as initial expenses in the year of incorporation of the company and that the loan under overdraft is based upon hypothecation of movables and repayable on demand reveal that the assessee cannot be said to have derived any advantage of an enduring character. (c)The test for determining an expenditure as capital or revenue has undergone a substantial metamorphosis and the Supreme Court in its latest pronouncements, according to Mr. Banerjee, has sufficiently indicated that the dictum of Lord Cave in Atherton v. British Insulated and Helsby Cables co. Ltd., (1) (1926) 10 T.C. 155 can no longer be considered as the last word on the point. He has traced the evolution of this branch of law from the earliest period and has made a painstaking endeavour to convince us that the principle for determining an expenditure as revenue or capital is not limited to the test adumbrated in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, (2) 27 I.T.R. 34, 44. According to him. the periodicity of expenditure and tenure or duration of any asset or advantage are no longer essential. Mr. ; Banerjee has submitted that on the facts of the instant case, the principles to determine the nature of expenditure could be derived from the following factors, namely, (a) the nature of the business; (b) the nature of the expenditure; (c) the nature of the right acquired, and (d) their relations inter se as set out in Abdul Kayoom v. Commissioner of I. Tax, (3) 44 I.T.R. 689, 703. (d) In any event, assuming that the test applied in Assam Bengal Cement co. Ltd. v. Commissioner of Income-tax, West Bengal, (supra) is the settled law on the subject, it has no application to the instant case inasmuch, as he overdraft facilities being repayable on demand and being covered under a deed of hypothecation do not endure to the assesses company any asset or advantage. Further, there are no materials to show any tenure or terminal points which have resulted in the purported asset or advantage of an enduring character. Reference has been made to a large number of cases by Mr. Banerjee, to support his contention that for the purpose of determining an expenditure as capital or revenue, there can be no test or principle which is of universal application. Reference has been made to a large number of cases by Mr. Banerjee, to support his contention that for the purpose of determining an expenditure as capital or revenue, there can be no test or principle which is of universal application. According to him different tests or considerations are relevant on the facts of each case. We may now refer to them in the order they have been cited. 4. IN Commissioner of Income-tax, Bombay v. Finlay Mills Ltd., (4) 20 I.T.R. page 475, the expenditure incurred by a company carrying on business of manufacturing and selling textile goods in registering for the first time the trade marks which were not previously in use was held to be revenue expenditure and an allowable deduction under sec. 10 (2) (xv) of the Income-tax Act, 1922, Kania, C.J., followed the principle laid down by Viscount Cave, L.C. in Atherton v. British, Insulated and Helsby Cables Ltd. (supra. But in applying the principle to the facts of that particular case he came to the conclusion that in his opinion, registration of a trade mark was neither an asset nor an advantage so as to make payment for its registration a capital expenditure. Similarly, in the Commissioner of Income-tax v, Centuries Spinning Co. Ltd., (5) 15 I.T.R 107, the assesses company which carried on a business of manufacture and sale of textile goods incurred an expenditure in fees consequent upon making application for its first registration, under the Trade Marks Act, 1940, of the trade marks which had been continuously in use. Stone, C.J. while endorsing the views of Viscount cave, held that the expenditure was attributable to revenue inasmuch as it was recurring and it did not bring into existence an asset or advantage for the enduring benefit of the trade. One of the reasons for arriving at the said conclusion was set out by him at page 117:- "in ray opinion the registration fees paid were not for the purpose of acquiring a right of transmissibility which did not previously exist; the enhanced status of registered mark is only incidental to the registration of an existing asset. But even if it could be regarded as a new right it is not enduring since in order to keep it up periodic payments are necessary". But even if it could be regarded as a new right it is not enduring since in order to keep it up periodic payments are necessary". The next case to which our attention has been drawn was Mohanlal Har Govind v. Commissioner of Income-tax, (6) 17 I.T.R. 473. In that case the assessees carried on business at several places as manufacturers and vendors of country-made cigarettes known as Bidis. These cigarettes were composed of tobacco rolled in leaves of a tree known as Tendu leaves, which were obtained by the assessees by entering into a number of short-term contracts with the government and other owners of forest. Under the contracts, in consideration of certain sum payable by installments, the assessees were granted exclusive or monopoly right to pick and carry away the Tendu leaves from the forest area described. It was held that the contracts were entered into by the assessees wholly and exclusively for the purpose of supply themselves with one of the raw materials of their business, that they granted no interest in land, or in the trees or plants, that under them it was the Tendu leaves and nothing but the Tendu leaves that were acquired, that the right to pick the leaves or to go on to the land for the purpose were merely ancillary to the real purpose of the contracts and, if not expressed, would be implied by law in the sale of a growing crop, and that, therefore, the expenditure incurred in acquiring the raw material was in a business sense an expenditure on revenue account and not on capital account, just as much as if the Tendu leaves had been bought in a shop. Their Lordships, in the judicial committee, after analyzing the terms and conditions of the short-term contracts came to the conclusion at page 476: "they are merely examples of many similar contracts entered into by the appellants wholly and exclusively for the purpose of their business, that purpose being to supply themselves with one of the raw materials of their business. The contracts grant no interest in land and no interest in the trees they plant themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves which of course implies a right to appropriate them as their own property". The contracts grant no interest in land and no interest in the trees they plant themselves. They are simply and solely contracts giving to the grantees the right to pick and carry away leaves which of course implies a right to appropriate them as their own property". Accordingly, they held that the expenditures incurred for entering into those contracts are of revenue nature inasmuch as they made no distinction between the facts of that case and the case where the Tendu leaves had been stored in a merchant's godown and they had bought the right to go and fetch them and so reduce them into their possession and ownership. 5. THE next case referred to was Jagat Bus Service, Saharanpur v. Commissioner of Income-tax, U. P. and Ajmer-Marwara, (7) 18 I. T. R. 13 where the assessee carrying on the business of running motors, buses and lorries on hire entered into an agreement with the State authorities under which, in consideration of a sum of Rs. 20,000/- payable annually as 'nazrana', the assessee was given, on monopoly, a right of plying motor vehicles on hire on a certain road for carrying passengers and goods for a period of five years. Under the said agreement, the assessee was entitled to a reduction on the annual payment if the road remained impassable for a certain number of days in any one year. Before entering into the agreement motor vehicles could be run on the road only on payment of a tax of Rs. 10/- per trip per motor vehicle. During the relevant year the assessee had to pay only a sum of Rs. 5,000/- to the State, the road being not in a motorable condition for several months. The Allahabad High Court held that the sum of Rs. 5,000/- paid under the agreement was a revenue expenditure. In that case: the assessee by these contracts has derived no additional advantage ; the expenditures have been incurred for the maintenance of status quo and to earn profit year to year. The test mentioned in the said case, it may be urged., are no longer good law after Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax (supra. In that case: the assessee by these contracts has derived no additional advantage ; the expenditures have been incurred for the maintenance of status quo and to earn profit year to year. The test mentioned in the said case, it may be urged., are no longer good law after Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax (supra. Whatever may be the position, Malik, C. J., himself has cautioned at page 22 that the decision of the question whether an item of expenditure is revenue expenditure or capital expenditure depends upon a variety of circumstances. The test laid down by him can only be construed as illustrative and not exhaustive. In fact, he has made it clear that "it is impossible to lay down any test which would meet all cases" our attention was then drawn to another type of case, namely, determination of the nature of expenditure incurred in acquiring quota rights, for instance, M. S. Kandappa Modaliar v. Commissioner of Income-tax, Madras, (8) 32 I. T. R. 313 the facts of which may be stated as follows: 6. FOUR persons entered into partnership for trading in cotton yarn and piece-goods, and when the trading was subjected to control, the firm obtained the prescribed quotas from time to time to carry on its export trade. One of the Partners retied from the firm and the him was reconstituted under the same trade name with the other three partners. The new firm entered into an agreement with the retiring partner that until be could obtain a separate quota, the him was to buy the entire quota goods and use it for their business and as recompense for the same, pay mm in accordance with the prevailing conditions. In accordance with this agreement the firm paid to the retiring Partner Rs. 13,500/- and Rs. 10,000/-during the accounting years 1944-45 and 1946-47 and claimed that this amount should be deducted from their taxable profits. The claim was disallowed on the ground that the payments were of capital nature. The madras High Court held that under the agreement with the retiring Partner nothing was laid out by the assessee firm on the acquisition of any asset of an enduring nature with the aid of which the firm could earn its profits. The claim was disallowed on the ground that the payments were of capital nature. The madras High Court held that under the agreement with the retiring Partner nothing was laid out by the assessee firm on the acquisition of any asset of an enduring nature with the aid of which the firm could earn its profits. It was not even a case of acquisition of any fresh quota rights, as the assessee firm had been enjoying quota rights and was taking advantage of the existing quota till the authorities allocated its quota between the assessee and the retiring Partner what the assesses agreed to pay was for the use of the quota with which the assessee could, obtain its stock-in-trade in export till the retiring Partner was allocated his separate quota, and the amounts paid to him under the agreement were, therefore, not of a capital nature and were allowable under sec. 10 (2) (xv) of the Income-tax Act. It is true that the quota rights do give to the new firm, in a broad sense, an advantage under which the right to export goods is permissible. But, on the facts and circumstances of this case, it is clear that was really a case ox payment for the use of the quota issued to another. Tue quota right which was being enjoyed by a firm consisting of lour persons has subsequently been used by a new firm consisting or three persons, No additional advantage was obtained by me new firm which the previous firm cud not enjoy or was not enjoying. The new firm by the temporary arrangement has been continuing the advantage which the predecessor firm was enjoying and the assessee was only maintaining the status-quo. Further, the expenditures incurred were not made once and for all. It was agreed that until the out-going partner would get a separate quota right the assessee would continue to incur the said expenditure every year. In any event, Rajagopalan, J. has come to the finding: "it was not capital expenditure. Nothing was laid out by the assessee firm on the acquisition of any capital asset, any asset of an enduring nature, with the aid of which the assessee firm could earn profits. It was not even a case of acquisition of any fresh quota rights, whether or not quota rights could be viewed as capital assets. Nothing was laid out by the assessee firm on the acquisition of any capital asset, any asset of an enduring nature, with the aid of which the assessee firm could earn profits. It was not even a case of acquisition of any fresh quota rights, whether or not quota rights could be viewed as capital assets. The assessee firm had its quota rights and it was bound to get its quota till the authorities complied with its request to order an allocation of quotas between the assessee firm and the retiring Partner. What the assessee agreed to pay him was for the use of the quota with which the assessee could acquire its stock-in-trade, cloth, for export to Ceylon till he was allowed his separate quota. Attention wag then drawn to Hindusthan Commercial Bank Ltd., in re,. (9) 21 I. T. R. 353 the facts of which may be stated as follows: The assessee, a bank, incurred during the relevant accounting year certain expenses in opening forty six new branches, sub-branches and pay offices a sum of Rs. 24,675/- as charges for advertisement, entertainment, etc. and another sum of Rs. 89,870/- representing salary, dearness and other allowances, rent, telephone, lighting, etc. incurred for the said purpose. The Allahabad High Court held that assuming the said sums of Rs. 24675/- and Rs. 89870/- being expenses incurred wholly and exclusively for the purpose of business they were in the nature of revenue expenditures. The facts of this case show that the expenses incurred are not for the commencement of the new business but for opening new branches for the purpose of extending the existing business. This is not a case where the assessee acquires a new business or new premises or has purchased new assets which could be included as an asset in the profit and loss account. Banking business in this case has been carried on from before and the expenditures are incurred for facilitating the existing business of the bank and for carrying it on more profitably by opening branches. Banking business in this case has been carried on from before and the expenditures are incurred for facilitating the existing business of the bank and for carrying it on more profitably by opening branches. Malik, C. J., it may be added, following the principles in Atherton v. British, Insulated n and Helsby Cables Ltd., (supra), on the facts of the case came to the following conclusion: "in the case before us all that has happened is that by reason of opening of new branches the outturn of the business may have increased on which assessee is liable to pay taxes. It cannot be said in this case that there has been any such acquisition of an asset which would amount to all the expenses being classed as capital expenditure. " 7. MR. Banerjee has also relied on Imperial Chemical Industries (India) Ltd., in re., (10) 3 I. T. R. 21, where one E. M. and Co., had entered into an agreement of commission agency with P and Co. which provided that either party by notice to the other might terminate the agreement and that six months after the receipt of such notice the agency would cease. The business of B. M. and Co. was taken over by the assessees. The assessees decided to conduct their own business in India and notice was given to P and Co. terminating their agency. The assessees agreed to pay a sum of Rs. 500/- per month for a period of five years or Rs. 30,000/- in lump as compensation to a certain extent for the losses of the agency provided P and Co. agreed to assist the assessees' employees in getting a thorough insight into the working of the business and further agreed mot to enter into competition with the assessees for five years. A sum of Rs. 10,000/- was thus paid to P and Co., in the year of account. The Calcutta High Court held that the expenditure was not of a capital nature inasmuch as the asessees were not nurturing or protecting a new business or purchasing anything in the nature of goodwill but only securing advantages for their undertaking and facilities for future operations and inasmuch as the payment was made out of circulating capital and did not result in any new asset or addition to the fixed capital of the assessees. Apart from the said conclusions arrived at on the facts of that case, Costello, J. has made it clear that it is not possible to lay down any hard and fast rule or to enunciate any rigid and scientific proof which can be applied as a criterion for deciding whether any particular payment is in the nature of capital expenditure or revenue expenditure. The learned Judge has, however, very rightly found out that the question is one of fact to be determined upon the facts of each particular case. In fact, he has concurred with the principle of Viscount Cave, namely, that where an expenditure is made not only once and for all but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade, there is good reason for treating such an expenditure as properly attributable not to revenue but to capital, the next case cited was The Commissioner of Income-tax, West Bengal v. Royal Calcutta Turf Club, (11) 41 I. T. R, 414. In this case, the Royal Calcutta Turf Club being of opinion that there was a risk of jockeys becoming unavailable and that such unavailability would seriously affect its business, established a school for the training of Indian boys as jockeys. The club during the accounting year spent a sum of Rs. 62,818/- on the running of the school and claimed that amount as deduction under sec. 10 (2) (xv. The Supreme Court held that the said sum was an allowable deduction. But it may be pointed out that Kapoor, J., at page 418, has come to a finding of fact that "if there were not sufficient number of efficient Indian Jockeys to ride horse its interest would have to suffer and it might have had to abandon its business if it did not take steps to make jockeys of the necessary caliber available. " he, thus, has come to the conclusion that the amount has been spent for preventing extinction of the assessee's business and for the preservation of its business. There is no question of any addition or accretion of any asset or advantage in that case. " he, thus, has come to the conclusion that the amount has been spent for preventing extinction of the assessee's business and for the preservation of its business. There is no question of any addition or accretion of any asset or advantage in that case. The next Supreme Court decision cited was Pringle Industries v. Commissioner of Income-tax (12) 40 I. T. R, 67, the facts of which may be stated as follows: the assessee Co, which carried on, inter alia, the business of selling Shahabad flagstones, obtained from a Jagirdar under a contract a right to extract stones from quarries situated in six named villages for a period of 12 years on the annual payment of Rs. 28,000/ -. To safeguard payment, a sum of Rs. 96,000/- was paid in advance as security of which Rs. 8,000/- was to be adjusted annually against Rs. 28. 000/- and the balance of Rs. 20,000/ - was payable in monthly installments of Rs. l,666-10-8p. The assessee had only the right to excavate stones and undertook not to manufacture cement and the Jagirdar undertook not to allow any other person to excavate stones in those areas. There was also another similar lease taken from the Government for a period of five years under which the appellant had to pay Rs. 9,000/- per year in monthly installments of Rs.750/- each. 8. THE question was whether the amounts paid by the assessee to the Jagirdar and the Government each year were revenue expenditure allowable under sec. 12 (2) (xv) of the Hyedrabad Income-tax Act corresponding to sec. 10 (2) (xv) of the Indian Income-tax Act, 1922. It was held (per kapoor and Hidayatullah, JJ. ; S. K. Das, J., dissenting) that the expenditures incurred were outgoings on capital account and were not allowable deductions. It has been urged by mr. Banerjee that the Supreme Court in this case has substantially modified its previous approval of Lord Viscount Cave's tests in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, (2) 27 I. T. R. 34, 44 inasmuch as the enduring character or the duration of a right or an advantage has not been considered as an important factor in determining an expenditure as capital or revenue. Ltd. v. Commissioner of Income-tax, (2) 27 I. T. R. 34, 44 inasmuch as the enduring character or the duration of a right or an advantage has not been considered as an important factor in determining an expenditure as capital or revenue. We are, however, of opinion, that the Supreme Court in Pringle Industries Ltd. v. Commissioner of Income-tax, (supra) has not deviated from the broad general principles which have been laid down in Assam Bengal cement Co. Ltd. v. Commissioner of Income-tax (supra) It is not always correct to connect "enduring benefit of a trade" with duration or length of time involved in a contract or transaction. The duration of a lease, for instance, may be long or short but that by itself cannot determine the nature of the asset or advantage which is brought into existence by the lease. In any event, neither Viscount Cave in Atherton v. British Insulated and Helsby Cables Ltd. (supra) nor Bhagawati, J. in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax (supra) has stated that the tests laid down by them are of universal application. The tests laid down are certainly important criteria for determining the character of an expenditure as capital or revenue but it has been repeatedly emphasised that those tests emerging from various authorities are not mutually exclusive and do not lay down a universal yard stick The supreme Court, in this case, has made it clear that different considerations may be material in different facts of the ease. For instance, in the case of long term lease the decisive factors in such cases will be the nature of the acquisition and the reason for the payment. The Supreme Court ill this case is satisfied that the assessee has acquired by his long term lease a right to win stones and that the leases have conveyed to him a part of the land. The stones in situ are not his stock-in-trade in a business sense nor a capital asset from which after extraction he has converted the stones into his stock-in-trade. The payment though periodic, in fact, is neither rent nor royalty, but a lump payment in installments for acquiring a capital asset of enduring benefit to his trade. Approving the well-established principles, on the facts of that case, the Supreme Court,, has treated the outgoings as on ' capital account. The payment though periodic, in fact, is neither rent nor royalty, but a lump payment in installments for acquiring a capital asset of enduring benefit to his trade. Approving the well-established principles, on the facts of that case, the Supreme Court,, has treated the outgoings as on ' capital account. Reliance was, then, placed on Abdul Kaiyoom v. The Commissioner of Income-tax, (supra) the facts of which may be stated as follows: The assessee firm which carried on business in the purchase and sale of conch shells took on lease from the Government "the exclusive rights, liberty, and authority to fish for, take, and carry away all chank shells" in the sea off the Coast line of a specified area for a period of 3 years on a consideration of a yearly rent of Rs.6,111/ -. Kapur and Hidayatulla, JJ., (S. K. Das, J. dissenting) held that the yearly rent of Rs.6,111/- paid by the assessee was an amount paid to obtain an enduring asset in the shape of an exclusive right to fish; the payment was not related to the chanks, which it might or might not bring to the surface ; it was not an amount spent in acquiring its stock-in-trade, it was, therefore, an expenditure of a capital nature, and though it was incurred for the purpose of the assessee's business, it was not allowable under sec. 10 (2) (xv. Mr. Banerjee has relied on a passage at page 703 where Hidayatulla, J. has stated: "what is decisive is the nature of the business, the nature of the expenditure, the nature of the right acquired, and their relation inter se; and this is the only key to resolve the issue in the light of the general principles, which are followed in such cases." 9. THESE four principles according to Mr. Banerjee, are the most practical and effective tests to be applied for determine whether an expenditure is revenue or capital in nature. The learned counsel for the assessee has suggested that in this case, the Supreme Court has further whittled down the principles of Viscount Cave as affirmed in Assam Bengal Cement Co, Ltd. v. Commissioner of Income-tax, (supra. On an examination of the judgment in its entirety, we are convinced that the Supreme Court has not only affirmed the principles in Assam Bengal Cement Co. On an examination of the judgment in its entirety, we are convinced that the Supreme Court has not only affirmed the principles in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax (supra) and Pringle Industries Ltd. v. Commissioner of Income-tax (supra) but has really amplified the scope and extent of the principles emerged from previous authorities. This is evident from the very passage Mr. Banerjee is relying on at page 703 where Mr. Justice hidayatullah has made it clear that the said test should be applied "in the light of the general principles, which are followed In such cases." 10. LASTLY, we may refer to a case cited by Dr. Pal, on behalf of the Commissioner, annapurna Cotton Mills Ltd. v. The Commissioner of Income-tax, (13) I. T. R. No. 27 of 1959 (unreported) where Bachawat, J. has agreed with the judgment of Sinha, J. and differed from that of Datta, J. and held, on the facts of that case, that a certain payment by the assessee company in respect of a debenture loan raised by it was a capital expenditure. Although the facts of the case are very much different from the instant case, Bachawat j. has followed the principles laid down in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, West Bengal, (supra) and, after discussing numerous decisions of Indian and English Courts, reiterated that the distinction between a capital and a revenue expenditure is not capable of precise formulation and that each case must be decided on its own particular facts, the cases cited and the conclusions arrived at seemed to give an impression that the tests propounded by them are of conflicting nature. But the conflict would be dissolved if the broad tests or principles emerging from the cases are considered as supplementary and not mutually exclusive. Although the question whether a particular expenditure is of capital or revenue nature is ultimately a question of fact depending on the circumstances of each case, yet certain broad principles and testa can be spelt out from the vast array of English and Indian decisions. In Assam Bengal Cement Co. Although the question whether a particular expenditure is of capital or revenue nature is ultimately a question of fact depending on the circumstances of each case, yet certain broad principles and testa can be spelt out from the vast array of English and Indian decisions. In Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax (supra) the Supreme Court has approved the propositions of law laid down by Mahajan, J, in Benarsidas Jagannath, in re,, (14) 15 I.T.R 185, and incorporating the conclusions of a large number of cases has summarized the broad tests which are of great practical importance. Bhagawati, J., at page 44 of the said report has set out the principles as follows: "1. Outlay is deemed to be capital when it is made for the initiation of a business, for extension of a business, or for a substantial replacement of equipment; Lord Sands in Commissioner of Inland Revenue v. Granite City Steamship Co., (15) (1927) 13 T.C. 1, 14. In City of London Contract Corporation v. Styles, (16) (1887) 2 T.C. 239, 243, Bowen, L.J., observed as to the capital expenditure as follows: 'you do not use it "for the purpose of" your concern which means, for the purpose of carrying on your concern, but you use it to acquire the concern'. Expenditure may be treated as properly attributable to capital when it is made not only once and for all but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade: [vide, Viscount Cave, L.C., in Atherton v. British Insulated and Helsby Cables Co. Ltd., (supra)]. If what is got rid of by a lump sum payment is an annual business expense chargeable against revenue, the lump sum payment should equally be regarded as a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether. Thus, if labour saving machinery was acquired, the cost of such acquisition cannot be deducted out of the profits by claiming that it relieves the annual labour bill; the business has acquired a new asset, i.e., machinery. The expression 'enduring benefit' or of a permanent character were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset. 11. The expression 'enduring benefit' or of a permanent character were introduced to make it clear that the asset or the right acquired must have enough durability to justify its being treated as a capital asset. 11. WHETHER for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business. Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital. Fixed capital is what the owner turns to profit by keeping it in its own possession. Circulating or Floating Capital is what he makes profit by parting with it or letting it change masters. Circulating Capital is capital which is turned over and in the process of being turned over yields profit or loss. Fixed Capital, on the other hand, is not involved directly in that process and remains unaffected by it the second test mentioned above by the Supreme Court has, in fact, incorporated the well-known dictum of Viscount Cave, L. C., in Atherton v. British Insulated and Helsby Cables Co. Ltd., (supra. The Supreme Court again in Pringle Industries v. Commissioner of Income-tax, (supra) and in Abdul Qayyum v. Commissioner of Income Tax (supra) has affirmed its previous decision in Assam Bengal Cement co. Ltd. v. Commissioner of Income-tax (supra. The second test to hold an expenditure as capital expenditure, as stated above, involves three elements : (i) expenditure must be made once and for all, i.e., it should not be a recurring expenditure ; (ii) the expenditure brings into existence an asset or advantage; (iii) the asset or advantage is for the enduring benefit of the business, it is urged on behalf of the assessee that the Supreme Court has given a go-by to Viscount Cave's dictum inasmuch as in Pringle Industries v. Commissioner of Income-tax (supra) 67 at page 91, Hidayatullah, J., has given periodicity of payment no significance. Similarly, in Abdul Qayyum v. Commissioner of Income Tax (supra) 689 at page 703, the enduring character has no longer been considered to be of any importance. 12. Similarly, in Abdul Qayyum v. Commissioner of Income Tax (supra) 689 at page 703, the enduring character has no longer been considered to be of any importance. 12. IN our opinion, the Supreme Court in Pringle Industries v. Commissioner of Income-tax (supra) and Abdul Kayoom v. Commissioner of Income-tax (supra) has not only affirmed principles enunciated in its previous decision in Assam Bengal Cement Co. Ltd. v. Commissioner of Income-tax, West Bengal, (supra), but has enlarged the scope of those principles in their application to the particular facts arid circumstances of a case. Taking the ratio of the said three Supreme Court decisions, it appears that the principles laid down there are not exhaustive or mutually exclusive. It is one thing to say that expenditures which are made once and for all and which bring into existence an asset or advantage of enduring character are capital expenditures and another thing to say that expenditures which are not made once and for all or which do not bring into existence an asset or advantage of an" enduring nature cannot be capital expenditure at all. In a proper case where all the three elements are present, namely, (i) expenditure is made once and for all (ii) expenditure brings into existence an asset or advantage and (iii) the asset or advantage is for the enduring benefit of the business, expenses incurred are of a capital nature. But the converse need not be true. It is possible that in a proper case, although the expenditures do not bring advantage of an enduring character, they may still be held to be of capital nature. Mr. Banerjee has submitted that even if Viscount Cave's dictum is accepted it must be modified by the following limitation, namely, "unless there are special circumstances which point to an opposite conclusion". In the instant case, there is no evidence before us about the details of the overdraft facility to enable us to hold that the assessee has not secured an asset of an enduring character. We, therefore, think there is no material which leads us to the conclusion that the expenditures are of a revenue nature. Applying the above principles of the Supreme Court, we may now discuss how far the overdraft facility endures to the assessee an advantage of an enduring character. We, therefore, think there is no material which leads us to the conclusion that the expenditures are of a revenue nature. Applying the above principles of the Supreme Court, we may now discuss how far the overdraft facility endures to the assessee an advantage of an enduring character. Ordinarily, the intrinsic nature of an overdraft is that the person in whose favour the overdraft is made or allowed gets a facility or an advantage to the effect that whenever a loan is required during the tenure of such facility, he has a right to draw any amount: or, in other words, the assessee, under the overdraft arrangement, has the right to borrow at any time money from the bank until the limit fixed under the overdraft arrangement exceeds. The overdraft facility cannot be equated with an exact amount of loan which the assessee obtains at a particular point of time. Expenditures necessary for or incidental to a particular loan are not the same thing as expenditures for a general arrangement to secure loans at any time. The company's general right to take loan from a bank under the arrangement as distinguished from get ting a short-term loan at a particular time is certainly much more beneficial to the company as a whole. Enduring benefit need not be permanent or ever lasting; nor it implies benefit of any nature, direct or indirect, immediate or remote. Thus enduring benefit is a mixed question of law and fact. As the overdraft facility enjoyed by the assessee in the instant case creates a security and confidence and opens the gateway to borrow money in general and to meet the liabilities in adverse situation, it connotes a substantial asset or an advantage to the assessee and the benefit which the assessee gets is an enduring benefit. It is quite possible that the overdraft facility in a particular case may involve a temporary short term loan or accommodation covering a small sum in which case it may be possible to come to the conclusion that the overdraft facility has not yielded an asset or an advantage of an enduring character. In the instant case, as stated earlier, there are no extenuating circumstances which compel us to conclude that the overdraft facility is not of an enduring benefit. In the instant case, as stated earlier, there are no extenuating circumstances which compel us to conclude that the overdraft facility is not of an enduring benefit. Under these circumstances the over draft facility in the instant case is a capital asset and payment for the acquisition thereof is a capital expenditure. Expenditure is not for the borrowing of a particular amount but for obtaining or securing an overdraft facility. The assessee may not utilize it at all during the accounting year but that contingency cannot override the fact that the company enjoys a definite facility under the overdraft arrangement for the period it is operative. We may refer to Commissioner of Income Tax, Calcutta v. H. Dear and Co. Ltd. (17) 52 I.T.R. 65, 73-74, where Sinha and Datta, JJ., held that the expenditures incurred for acquiring right to buy stock-in-trade were capital in nature but the expenses for buying stock-in-trade were revenue in character. Similarly, by the overdraft arrangement, the assessee secures for himself a means or instrument for the supply of capital. The overdraft facility gives the assessee a general credit right and as such, is an asset of an en during nature. It gives the assessee an instrument for earning profits. In the instant case the expenditures which have been claimed by the assessee as of revenue character have been incurred for arranging over draft facilities and have not been made to secure a particular loan at any point of time. We are, therefore, of opinion that the overdraft facility has given the assessee an asset or advantage of en during character and, as such the expenditures which have been made once and for all to secure that facility must be a capital expenditure. Lastly, Mr. Banerjee, has urged that there are no sufficient materials on the basis of which the Income-tax Officer could come to the conclusion that the particular overdraft facility in the instant case has brought into existence an asset or advantage of an enduring character. According to him, the Income-tax Officer should have arrived at the said conclusion after examining the terms of the deed of hypothecation, the nature of the loan, reasons for taking the overdraft arrangement, and the fact that the loan was repayable on demand. The burden of proving the fact, he has stated, that the expenditures involved are of capital nature is on the department. The burden of proving the fact, he has stated, that the expenditures involved are of capital nature is on the department. The assessee has discharged his onus, ac cording to Mr. Banerjee, by relying on the four primary fads mentioned above and beyond that the assessee cannot the required to prove the negative. The Income-tax Officer should have relied on some material before he has deter mined the taxability of the assesses in respect of the said amounts. Relying on Narayan Chandra. Baidya v. Com missioner of Income Tax, (18) 20 I.T.R. 287, 292, R.B.N.J. Naidu v. Commissioner of Income-tax, (19) 29 I.T.R. 194, 203, Hochstrasser (Inspector of Taxes) v. Mayes, (20) 42 I.T.R. 457, 469, and Commissioner of Income-tax, Punjab v. Indian Woollen Textile Mills, (21) 51 I.T.R. 291, Mr. Banerjee has concluded that the onus of proving the said expenditure as capital expenditure is shifted to the department which has failed to place sufficient material for coming to the said conclusion. Ac cording to him, the Tribunal must consider the evidence covering all essential materials. The Tribunal, in the instant case, has not considered all essential materials. Its conclusion, ac cording to Mr. Banerjee, amounts to misdirection in law. We are of opinion that there is no substance in the contention. Dr. Pal, learned counsel for the department, has accepted all the four primary facts mentioned above by Mr. Banerjee and has submitted that on the basis of those facts the Income-tax Officer is justified in coming to the conclusion that the expenditure is of capital nature. As stated above, ordinarily, the overdraft facility gives an advantage of an enduring character because the person in whose favour the overdraft facility is given is in a position to borrow at a time or at any time money from the bank until the limit fixed under the overdraft arrangement exceeds. Mr. Banerjee has relied on Western India Plywood Ltd. v. Income-tax Commissioner, (22) 33 I.T.R. 533 in which case the Kerala High Court in coming to the conclusion that the raising of money by debenture or mort gage is in the nature of capital expenditure, has expressed a view that a temporary accommodation or a banking or overdraft arrangement cannot be considered as a part of the capital asset of the assesses company. We have already stated that we have no material before us which can give us an indication as to the nature of the facility which the assessee company in the instant case has got under the overdraft arrangement. The assessee is claiming an allowance under sec. 10 (2) (xv) of the Income-tax Act, 1922 and, therefore, the burden of proving the necessary facts to claim such ex emption is on the assesses. There should have been positive evidence to show that the facility or advantage they have obtained is a short-term or casual or temporary loan and that such overdraft it an ordinary incident of the assessee's business. We may, in this connection, refer to the Commissioner of Income-tax v. Calcutta Agency Ltd., (23) 19 I. T. R. 191, where Kania, C. J., has held that the burden of proving necessary facts for claiming exemption of an amount under sec. 10 (2) (xv) is on the assesse. We cannot, therefore, accept Mr. Banerjee's contention in the circumstances of this case, particularly in view of the fact that there is no material before us to evaluate the terms of the deed of hypothecation, the tenure or the limit or nature of the over draft. 13. IN the premises, we answer the question in the affirmative and state that the Tribunal was justified in holding that the sum of Rs. 35,800/- incurred by the assessee for the purposes of raising or securing overdraft facilities from bank was an expenditure of a capital nature not allowable under sec. 10 (2) (xv. The assessee shall bear and pay the costs of this reference.