Dr. B. P. Saraf, J.:- The Income-tax appellate Tribunal, Gauhati Bench has referred under Section 256 (1) of the Income Tax Act the following questions of law to this Court for its opinion : i) Whether on the facts and in the circumstances of the case, the payment of Rs.37,500/-under an agreement dated 1.7.76 was an admissible deduction in computing the income of the assessee firm for the assessment year 1976-77 ? ii) Whether on the facts and in the circumstances of the case and upon a reading of the agreement dated 1.7.75, the Tribunal was justified both in law and in fact in holding that the payment of Rs. 37,500/-was part and parcel of the whole transaction for the acquisition of a capital asset of an enduring nature and was not related to the carrying on and the conduct of the business ? 2. The reference relates to assessment year 1976-77. The relevant previous year is calendar year 1975. 3. The assessee is a partnership firm. It was constituted by a deed of partnership dated 30.6.75. It took over certain Tunning businesses. An agreement was executed on 1.7.75 betwe­en the assessee and the vendors for the purpose. In clause (3) of the said agreement, there was a stipulation for payment of a sum of Rs.50.000/-by the assessee to the vendor for the use and utilisation of the trade name, pending import licence, contracts and other trading benefits and advantages. During the relevant year, a sum of Rs.37,500/-was paid by the assesses in pursuance of aforesaid stipulation. This amount was claimed as a deduction as business expenditure. The Income-tax officer did not allow the claim on the ground that it was capital expenditure. On appeal the Commissioner of Income-tax (Appeals) sustained the order of the Incomes Tax Officer. On second appeal the Tribunal also upheld the disallowance. The assessee sought for a reference under Section 256 (1) of the Act of the questions of law arising out of the order of the Tribunal. The Tribunal on being satisfied that questions of law did arise out of the order, referred the two questions quoted above to this Court. 3A. Heard Dr. M. K. Saroii, learned counsel for the ass­essee as well as the learned Standing Counsel for the Revenue. Considered the facts of the case. Also perused the agreement dated 1.7.75. The Tribunal on being satisfied that questions of law did arise out of the order, referred the two questions quoted above to this Court. 3A. Heard Dr. M. K. Saroii, learned counsel for the ass­essee as well as the learned Standing Counsel for the Revenue. Considered the facts of the case. Also perused the agreement dated 1.7.75. The two clauses of the agreement namely, clauses (3) and (5) which are relevant, read as follows: "3. That parties hereto mutually agree and the party hereto of the second party undertake to pay the party beret) of the first part of sum of Rs.50,000/-( Rupees fifty thousand only) annually for three years ending 31st March, 1978 for use and utilisation of the trade name, pending import licences, contracts and other trading ben­efits and advantages and the party hereto of the first part agrees to accept the same in full and final satisfaction of all their right, titles, claim, advantages and benefits. 5. That the party hereto of the second part agrees to pay to the party hereto of the first part the value of assets over the liabilities taken over on the final compilations of the books of account of the aforesaid business as on 31st day of March, 1975." From a conjoint reading of aforesaid two clauses, it is evid­ent that the assessee agreed to pay to the vendor, in addition to the value of assets taken over by it, for a period of three years a further sum of Rs. 50,000/-per year for the "use and utilisation of the trade name, pending import licences, contracts and other trading benefits and advantages." On a plain reading off clause (3), it appears that this payment was stipulated not for acqu­isition of any asset but for use of certain rights or trading, benefits, advantages etc. The question of law that falls for dete­rmination is whether such a payment is capital expenditure or revenue expenditure. 4. The expression ''Capital expenditure" or "expendiure in the nature of capital expenditure" have not been defined in the Act. These two expressions, however, have been interpre­ted by the courts from time to time. Some tests have been also evolved to determine when an expenditure can be said to be "capital expenditure" and when it is "revenue expenditure". 4. The expression ''Capital expenditure" or "expendiure in the nature of capital expenditure" have not been defined in the Act. These two expressions, however, have been interpre­ted by the courts from time to time. Some tests have been also evolved to determine when an expenditure can be said to be "capital expenditure" and when it is "revenue expenditure". A brief resume of the important tests and their evolution may be helpful to answer the questions referred to us in this case. The earliest test can be traced back to the year 1910 or so when Lord Dunedin said: "In a rough way, I think it is not a bad criterion of what is capital expenditure-as against which is revenue expenditure-to say that capital expenditure is a thing that is going to be spent once and for all, and income expenditure is a thing that is going to recur every year." (Vallambrosa Rubber Co.Ltd. vs. Farmer (1910)5 TC 529, 536). Five years later, Rowlatt J. observed : "the real test is between expenditure which is made to meet a continuous demand as opposed to an expenditure which is made once for all". (Qunsworth v. Vickers Ltd, (1915) 3 K. B 267, 273). Then came the oft-quoted test evolved by Viscount Cave L. J.: "When 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 very good reason (in the absence of special circums­tances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital". (British) Insulated and Helsby Cables Ltd. v. Atherton (1926) AC 205, 213 (HL) : 10 TC 155, 168) 5. This test on the face of it was not intended to be of universal application as is evident from the rider added thereto which shows that it would not apply where there are special circumstances leading to a contrary conclusion. Viscount Radcliffe dealing with the ''enduring benefit test" enunciated by Viscount Cave, observed : ".. This test on the face of it was not intended to be of universal application as is evident from the rider added thereto which shows that it would not apply where there are special circumstances leading to a contrary conclusion. Viscount Radcliffe dealing with the ''enduring benefit test" enunciated by Viscount Cave, observed : ".. it has to be remembered that all these phrases, as, for instance, 'enduring benefit' or 'capital structure' are essentially descriptive rather then definitive, and, as each new case arises for adjudication and it is sought to reason by analogy from its facts to those of one previously decided, a court's primary duty is to inquire how far a description that was both relevant and significant in one set of circumstances is either significant or relevant in those which are presently before it. For example, while it is certainly important that in Atherton's case expenditure that did secure an enduring benefit for a company's busi­ness was spoken of as being for that reason a capital expenditure, it would be a misuse of that authority to suppose that it gives any warrant for the idea that secu­ring a benefit for the business of prima facie capital expenditure, so long as the benefit is not so transitory as to have no endurance at all". (Commissioner of Taxes v. Nchanga Consolidated Copper Mines Ltd., (1965) 58 ITR 251 SC). 6. There is another test that was applied by Viscount Haldane. It is based on distinction between fixed capital and circulating capital. According to it, an expenditure would be capital in nature if the right or benefit acquired thereby is a part of the fixed capital. This is often referred to as Haldane's test. (John Smith & Sons v. Moore (1921) 12 TC 256 HL). Lawrence J. later improved upon the Haldane's test and observed : "When a sum of money is laid out for the acquisi­tion or improvement of a fixed capital asset it is attribu­table to capital, but that if no alteration is made in the fixed capital by the payment, then it is properly attributable to revenue, being in substance a matrer of maintenance, the maintenance of the capital structure or the capital assets". (Southern v. Borax Consolidated Ltd. (1942) 10 ITR (Suppl) I, 5 (K. B.). 7. Some other criteria also emerged from time to time depending upon the facts of particular cases. (Southern v. Borax Consolidated Ltd. (1942) 10 ITR (Suppl) I, 5 (K. B.). 7. Some other criteria also emerged from time to time depending upon the facts of particular cases. In regard to intan­gible assets, ordinary commercial principles in respect of assets were held to be the guide, (Regent Oil Mills Co. v. Stride (1969) 13 ITR 301, HL). There are some of the well known tests evolved by the English Courts. 8. We may now advert to the tests evolved and accepted by the Courts in India, There are a number of decisions of the Supreme Court and the various High Courts which have dealt with the question of capital expenditure and revenue expen­diture, discussed the various tests, accepted some of them with or without rider or evolved new tests and given guidelines to deal with the problem. One test that got widest application is the test of "enduring benefit" enunciated by Viscount Cave. It was, however, not accepted in all cases without reservation. It was observed that every test has its own shortcomings and no test is of universal application. The test of enduring benefit was held to be not applicable where the benefit is transitory to have no endurance at all. There may "be cases where expenditure even if incurred for obtaining advantage of enduring nature may never­theless be on revenue account and test of enduring benefit may break down. The expressions "enduring benefit" and "right of permanent nature" also came up for interpretation before the Supreme Co art in Devidas v C.I.T.,(1972) 84 ITR 227,284-5) It was held that the said expressions are only descriptive and not definitive and are relative in meaning, not synonymous with perpetual or ever lasting. It should not be so transitory and ephimeral that it can be terminated at any time at the volition of the parties (C I.T. v. Coal Equipments P.Ltd) (1971) 82 ITR 902 SC). 9. However, despite various tests evolved in long string of cases to determine what is attributable to capital and what to revenue, the controversy still per sits and has to be decided afresh in each case applying one test or the other. None of the tests, as observed by Hidayatulla, J. (as his Lordship then was) is either exhaustive or universal. However, despite various tests evolved in long string of cases to determine what is attributable to capital and what to revenue, the controversy still per sits and has to be decided afresh in each case applying one test or the other. None of the tests, as observed by Hidayatulla, J. (as his Lordship then was) is either exhaustive or universal. Each case depends on its own facts and a close similarity between one case and the other is not enough, because even a single significant detail may miter the entire aspect. (Abdul Kayoom vs. CJ T. (1962) 44 ITR 698, 703 SC). The following note of caution given by his Lordship is very pertinent. "In deciding such cases, one should avoid the tempta­tion to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide, therefore, on which side of the line a 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" (Abdul Kayoom, Supra) 10. This position of law was reiterated be the Supreme Court in a number of cases. The well accepted position as on to-day, therefore, appears to be that no test of universal appli­cation can be laid down to determine the question whether an expenditure made by the assessee was revenue expenditure or capital expenditure. It must depend on the facts and circumst­ances of each case on the application on the proper principles of law. One of the guiding factors, however should be the object of expenditure (C I.T. vs. British India Corporation Ltd., Kanpur (1987)165 ITR SI SC). This Court dealing with identical problem, in a recent case Commissioner of Income-tax vs. Makhan Sarmah (1989)1 GLR 227 referring to some of the leading cases on the subject observed. "It is in this regard we see tests were laid in two lea­ding cases, 82 ITR 376, Lakshmiji Sugar Mill Co. (P) Ltd. vs. C. I. T. and 106 ITR 900, Travancore Cochin Chemicals Ltd. vs. C. I. T. The test laid in the former case was congealed to the facts of the case in the latter case. "It is in this regard we see tests were laid in two lea­ding cases, 82 ITR 376, Lakshmiji Sugar Mill Co. (P) Ltd. vs. C. I. T. and 106 ITR 900, Travancore Cochin Chemicals Ltd. vs. C. I. T. The test laid in the former case was congealed to the facts of the case in the latter case. In 125 ITR 293 L.H. Sugar Factory & Oil Mills Ltd. Commissioner of Income tax, the latter case was held to be a case on facts and the former decision in 8B ITR 376 was resurrected". 11. The present state of law on the subject was aptly described by Raghuvir, CJ. as "the state of wobbling authorities" and it was rightly concluded by his Lordship that "No test of universal application can laid down by the Courts". (Commissioner of Income - tax vs. Makhan Sarmah, Supra) 12. Therefore, the question whether an expenditure is off account of revenue or capital, has to be decided by looking at the facts and circumstances of the case from the point of view of a practical and prudent business-men rather than front the view point of a tax gatherer upon strict juristic classification of the legal rights, if any, secured in the process. In order to arrive at a just and proper conclusion one must look at the true nature and character of advantage in a commercial sense (without giving undue emphasis to the form thereof or the terminology used) in the light of the surrounding circumstances and in the larger context of necessity and expediency. If the expenditure is so related to the carrying on or conduct of the business, that it may be regarded as an integral part of the profit making process and not for acquisition of an asset or a right of permanent character, the expen­diture may be regarded as revenue expenditure even though the advantage may endure for an indefinite future. 13. The question referred in case before us, therefore, have to be decided on its own facts bearing in mind the broad principles discussed above. Admittedly the payment of Rs. 37, 500/-was made for "use and utilisation of the trade name, pending import licence, contracts and other trading benefits and advantages". These rights so acquired evidently facilitated the day to day trading operations of the assessee and were intended to increase profit. Admittedly the payment of Rs. 37, 500/-was made for "use and utilisation of the trade name, pending import licence, contracts and other trading benefits and advantages". These rights so acquired evidently facilitated the day to day trading operations of the assessee and were intended to increase profit. No asset or right of permanent nature was acquired thereto. It is not even a case where the advantage will endure for indefinite future. Considering the nature and advantages obtaining the user of the rights in ques­tion in the commercial sense, we are of the opinion that the pay­ment of Rs. 37,500/-in the instant case was a revenue expenditure. 14. In our aforesaid conclusion we are supported by the decision of this Court in Commissioner of Income tax v. Makhan Sarmah, Supra wherein expenditure incurred for insta­llation of new power line and equipments was held to be inc­urred for the purpose of running the factory efficiently and as such, revenue expenditute in nature. There is a decision of the Supreme Court in Empire Jute Co. Ltd. vs. C.I.T.,(1980) 124 ITR 1, wherein the Supreme Court held that the expenditure incu­rred for the purpose of operating looms for longer working hours was primarily and essentially relating to ...the operation or working of the looms which constituted profit making app­aratus and was expenditure laid out as part of the process of profit earning, and, as such, revenue expenditure. In the aforesaid case, the Supreme Court also referred to the analogy of quota right. It was observed that where acquisition of raw material is regulated by quota system and in order to obtain more raw material, the assessee purchased quota right of another, the amount paid for purchase of such quota right would ind­ubitably be revenue expenditure since it is incurred for acqui­ring raw material and is a part of operating cost. Another, instance given by the Supreme Court related to payment made for securing additional power every week. It was observed that such payment would also be part of the cost of operating the profit making structure and hence in the nature of revenue expenditure, even though the effect of acquiring additional power would be to augment the productivity of the profit making structure. It was observed that such payment would also be part of the cost of operating the profit making structure and hence in the nature of revenue expenditure, even though the effect of acquiring additional power would be to augment the productivity of the profit making structure. We may also gainfully refer to a recent dec­ision of the Calcutta High Court in C.I.T.v. Kusum Products Ltd. wherein premium paid on purchase of import entitlement was held to be deductible as revenue expenditure. There is also a decision of the Bombay High Court in C. I. T. vs. Desmut (India, Pvt. Ltd. (1982) 138 ITR 382, where payment of commission to another company as consideration for execution of unfinished contracts was held to be revenue expenditure. It was observed that no enduring benefit or advantage was obtained from such payment. We find ourselves in agreement with these decisions of the Calcutta and Bombay High Courts. 15. On the analogy of the aforesaid cases and in the light of the principles of law discussed earlier, we hold that the expenditure incurred in the instant case is revenu e expen­diture and allowable as a deduction in computing taxable income of the assessee. In the result, we answer the first question ref­erred to us in affirmative and the second question in the negative. Both the questions are thus answered in favour of the assessee and against the revenue. Parties shall, however, bear their own costs.