JUDGMENT : G.T. Nanavati, J. At the instance of the Revenue, the Income-tax Appellate Tribunal, Ahmedabad, has referred the following two questions to this court under section 256(1) of the Income Tax Act, 1961 : " (1) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the expenditure of Rs. 1,70,000 incurred by the assessee as installation charges for computer machinery was revenue expenditure and as such an allowable deduction ? (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that an amount of Rs. 8,287 being the amount paid by the assessee to some of its employees was only dis-allowable under section 40A(5) of the Act out of the total amount of Rs. 14,603 ?" 2. The relevant assessment year is 1970-71. The assessee is a limited company carrying on business of manufacturing pharmaceuticals, medicines, etc. During the year relevant to the assessment year, the assessee entered into an agreement with International Computers (India) Private Limited for installation of computer machines at its business premises on hire basis. The hire charges were fixed at Rs. 4,09,213 per year. The assessee had to incur an expenditure of Rs. 1,70,000 for installation of the said computer machines. It claimed deduction of that amount as revenue expenditure. The assessee had also paid Rs. 14,603 to its employees by way of bonus. Deduction in respect of that amount was also claimed. 3. The Income-tax Officer was of the view that the expenditure incurred towards the installation of computer machines was expenditure of capital nature as it had resulted in the creation of intangible assets. He, therefore, disallowed the claim of the assessee for deduction of that amount as revenue expenditure. As regards the amounts paid to the employees by way of bonus, the Income-tax Officer was of the view that, since the said payments were not governed by any special agreement or by the provisions of the Bonus Act, they amounted to perquisites in the case of those employees who were drawing a salary of Rs. 7,500 and more. Applying the provisions of section 40A(5), he disallowed the claim of the assessee. 4. In appeal, the Appellate Assistant Commissioner held that the expenditure of Rs. 7,500 and more. Applying the provisions of section 40A(5), he disallowed the claim of the assessee. 4. In appeal, the Appellate Assistant Commissioner held that the expenditure of Rs. 1,70,000 by way of installation charges was not of capital nature but it was revenue expenditure as the computers were not owned by the assessee nor can the said computers be compared with plant and machinery. Following the decision of the Madras High Court in CIT v. India Radiators Ltd. [1976] 105 ITR 680, the Appellate Assistant Commissioner held that the amounts paid by way of bonus cannot be treated as perquisites and further held that only a sum of Rs. 8,287 was liable to be disallowed. 5. As the Revenue was not satisfied with the order passed by the Appellate Assistant Commissioner as regards the installation charges, and as both the parties were not satisfied with the decision of the Appellate Assistant Commissioner with respect to the payment by way of bonus, they preferred appeals to the Tribunal. The Tribunal held that, as the computers were only hired by the assessee and as the supplier had a right to take them back after giving a short notice, it cannot be said that the assessee had acquired a benefit or advantage of an enduring nature. It, therefore, confirmed the decision recorded in this behalf by the Appellate Assistant Commissioner on this point. With respect to the amounts paid by way of bonus, the Tribunal agreed with the Appellate Assistant Commissioner that the said payments would amount to salary and not perquisites. However, in view of the fact that the assessee had agreed before the Appellate Assistant Commissioner that the claim for Rs. 8,287 may be disallowed, the Tribunal declined to interfere with the decision of the Appellate Assistant Commissioner on this point. 6. Aggrieved by the decision of the Tribunal, the Department preferred an application to it for referring the abovestated two questions to this court. 7. It was submitted by learned counsel for the Revenue that by incurring the expenditure of Rs. 1,70,000, the assessee had acquired an advantage of a permanent nature inasmuch as the cable and other articles which were installed for the purpose of obtaining the facility of computers can be said to be assets of enduring nature. 7. It was submitted by learned counsel for the Revenue that by incurring the expenditure of Rs. 1,70,000, the assessee had acquired an advantage of a permanent nature inasmuch as the cable and other articles which were installed for the purpose of obtaining the facility of computers can be said to be assets of enduring nature. What is to be borne in mind is that the assessee never installed the cable and other things for the sake of installing them as assets. They were installed as they were found to be necessary for the purpose of working of the computers. Thus, the said expenditure was incurred with a view to see that they get the advantage or facility of the computers which were installed by the International Computers (India) Pvt. Ltd. on payment of hire charges. So far as the computers are concerned, it is an admitted position that the computers belong to the International Computers (India) P. Ltd. and that they did not become the property of the assessee. It is also not in dispute that it was open to the supplier of the computers to remove them on giving a short notice to the assessee. It is, therefore, difficult to appreciate how the assessee can be said to have acquired a benefit or advantage or facility of enduring nature by incurring that expenditure. In fact, the said computers were removed by the supplier within two or three years from the date of installation of these computers. There is no material to show that the assessee in fact wanted to install them on a permanent basis either by purchasing the same or by entering into an arrangement with someone in that behalf. A similar view has been taken by the Andhra Pradesh High Court in the case of CIT v. Nizam Sugar Factory Ltd. (No. 2) [1979] 116 ITR 706. In that case, the assessee had installed a data processing machine on lease. The assessee had incurred an expenditure of Rs. 1,27,687 by way of installation charges. One of the conditions of the lease was that the machines would be removed at any time by the supplier after giving three months' notice or at any time after the expiry of one year from the date of installation. The assessee had incurred an expenditure of Rs. 1,27,687 by way of installation charges. One of the conditions of the lease was that the machines would be removed at any time by the supplier after giving three months' notice or at any time after the expiry of one year from the date of installation. On these facts, it was held by the Andhra Pradesh High Court that the assessee, by installing the data processing machine, had not acquired any enduring benefit or advantage. No decision taking a contrary view has been cited before us. As regards the payments by way of bonus, it is settled law that such amount cannot be regarded as perquisites but they are required to be regarded as salary. In CIT v. India Radiators Ltd. [1976] 105 ITR 680, the Madras High Court has taken that view and we respectfully agree with the same. It cannot, therefore, be said that the Tribunal was wrong in declining to interfere with the order passed by the Appellate Assistant Commissioner. 8. We, therefore, answer both the questions in the affirmative, that is, against the Revenue and in favour of the assessee. This reference is disposed of accordingly with no order as to costs.