Honble SINGHAL, J.—The Income-tax Appellate Tribunal has referred the following three questions of law arising out of its order dated 11.2.1981 in respect of assessment year 1978-79 : — "(1) Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the assessee is entitled to claim deduction of bank charges, legal fees and interest amounting to Rs. 9075-/, Rs. 10,000/- and Rs. 30,787/- respectively as revenue expenditure? (2) Whether on the facts and in the circumstances of the case the Appellate Tribunal was justified in holding that the travel tag and other expenses incurred on Shri Sunil Kumar Sah, Director of the Company and Smt. Kum Kum Sah w/o Shri Sunil Kumar Sah Director for undertaking training in produc-tion methods of costume jewellery for the new project which was proposed to be set up was capital expenditure: (3) Whether on the facts and in the circumstances the Tribunal has rightly held that the assessee is not entitled to depreciation with reference to travelling expenses incurred on Shri Sunil Kumar Sah, Director in connection with his visit to Austria"? (2) Question No. 1 has been referred on the application of Commissioner of Income-tax while questions No. 2 and 3 have been referred on the application of the assessee filed under Section 256(1) of the I.T. Act, 1961. (3) No one has appeared on behalf of the assessee inspite of due service of notice. It appears that the assessee is not interested in agitating the grievance raised in question No. 2 and 3 and, therefore, these questions are returned unanswered. (4) So far as question No. 1 is concerned, the relevant facts are that the assessee company was running a Cinema at Kota and wanted to set up a factory for manufacture of costume artificial jewellery. Expenses of Rs, 9,075/- were incurred as bank charges which were paid to the Bank as commission for guarantee given by it to the Govt. of India for import of machinery. Rs. 30,787/- were incurred as interest paid on money borrowed for the purpose of machinery. Rs. 10,000/- were paid as fees of the Advocate for attending the case pertaining to acquisition proceedings of the land purchased by the assessee for the aforesaid project. The assessee claimed these expenses as revenue expenditure. of India for import of machinery. Rs. 30,787/- were incurred as interest paid on money borrowed for the purpose of machinery. Rs. 10,000/- were paid as fees of the Advocate for attending the case pertaining to acquisition proceedings of the land purchased by the assessee for the aforesaid project. The assessee claimed these expenses as revenue expenditure. The Income-tax Officer came to the conclusion that the bank charges cannot be allowed as it has nothing to do with the assessees previous business and the claim of legal fee was disallowed on the ground that expenditure relate to the agriculture land of which income is not taxable and cannot be allowed as business expenditure and in respect of claim of interest since it is attributable to the capital borrowed for starting a new project the interest cannot be allowed. In the appeal preferred to the. Commissioner of Income-tax it was held that the expenses are allowable only in respect of the business which was actually carried on by the assessee during the relevant previous year, expenses incurred in connection with a business which was yet to be set up during the relevant previous year cannot be allowed. It was further held that for different business, separate previous year can be opted by the assessee and as such in respect of new business the previous year starts only from the date of setting up of a new business. The appeal was dismissed. (5) In the second appeal before the Income-tax Appellate Tribunal relying on the decision of Produce Exchange Corporation Ltd. (1) it was held that the different venture constitute single business when the unity of control of business is at one place and as such these expenses are allowable. (6) Section 36(l)(iii) of the Act provides that the amount of interest paid in respect of capital borrowed for the purpose of business shall be allowed as deduction while computing the income under Section 28. (7) In the case of C.I.T. vs. Shah Theatres Pvt. Ltd. (2) this Court has held that the business of exhibition of motion pictures and that of starting construction of the cinema theatre is same. The interest paid on such borrowing was held allowable as it was incurred in connection with the extention of existing business and not for setting up of a new business. The interest paid on such borrowing was held allowable as it was incurred in connection with the extention of existing business and not for setting up of a new business. (8) In order to determine as to whether the bank charges, legal fees and interest could be claimed as revenue expenditure the nature of the payment has to be examined. As a general proposition there cannot be any rule of thumb to determine as to whether a particular expenditure is a capital or revenue. The nature of business, nature of expenditure, nature of rights acquired and their relations inter se are to be examined with reference to the particular case. Normally, the word capital expenditure connotes an expenditure which is having permanency, securing tangible or untangible corporal or incorporeal rights having lasting or enduring benefit. In the words of Viscount Cave L.C. in Athertons vs. British Insulated and Helsby Cables Ltd. (3) "when an expenditure is made, not only once and for all, but with a view to bring into existence an asset or an advantage of enduring benefit of a trade, there is a very good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such an expenditure as properly debitable not to revenue but to capital." The matter has been considered by the Apex Court in various decisions and the expenditure for acquisition of capital asset, expenditure once for all (in contrast of recurring expenditure) expenditure for acquiring an enduring benefit and expenditure relating to fixed capital (in contrast of circulating capital) were considered as capital expenditure. Still none of these principles could be said to be of universal application or the conclusive test. (9) The amount of bank charges were in respect of commission charges paid to Canara Bank for guarantee given for the purpose of import of machinery concerning the costume artificial jewellery business. The Income-tax Appellate Tribunal has proceeded on the assumption that the different ventures constitute a single business as the unity and control of the business is at one place. In the present case the previous business of cinema and the venture regarding setting up of a factory for manufacture of costume jewellery were considered as the same business. It was on this account that the legal fees was also allowed as revenue expenditure. In the present case the previous business of cinema and the venture regarding setting up of a factory for manufacture of costume jewellery were considered as the same business. It was on this account that the legal fees was also allowed as revenue expenditure. It is undisputed that the commercial charges by Bank are in connection with guarantee given by the Bank to the Govt. of India for the import of machinery for the new unit which had not been imported during the accounting period relevant to the assessment year. Similarly, the interest on borrowed money is for the purpose of purchase of machinery which was neither installed nor put to use during the accounting period relevant to the assessment year. (10) An expenditure made under a transaction which is closely related to the business could be viewed as an integral part of the conduct of the business and can be considered as revenue expenditure if it is laid out wholly or exclusively for the purpose of business. The expenditure has to be considered in the larger contest of business necessity or expediency. (11) In Challapalli Sugars Ltd. vs. CIT (4) the amount of interest expended for acquiring capital asset prior to commencement of the business was held to be a capital expenditure. (12) In Sampat Commercial vs. CIT (5) the assessee purchased machinery out of money borrowed and installed the machinery and paid the interest on such borrowed capital which was claimed as revenue expenditure. It was held that mere purchase and erection of the machinery would not amount to starting of business, though they may be essential primary steps for starting the business. The assessee could be taken to have started the business only when his plant and machinery went into production; (13) In CIT vs. Alembic Glass Industries Ltd. (6) where the business organisation, administration and funds of the two units of the assessee were common and the control and administration of both the units was under one company which supplied the staff to both the units and managed whole of the business administration of both the units and there was complete inter-connection, interlacing and interdependence and unity of both the units, it was held that two lines of business constitute the same business. The decision of the Apex Court in Challappali Sugars Ltd. referred to above and the decision of India Cement Ltd. vs. CIT (7) were considered and the following principles were laid down : — (1) Where a borrowing is made for the purposes of a business, the interest paid on such a borrowing becomes eligible to deduction contemplated by Sec.l0(2)(iii) of the Act, 1922 or Sec. 36(l)(iii) of the Act, 1961; (2) This would be so, even if the capital is invested in order to acquire a revenue asset or a capital asset, because of the act borrowing capital is distinct from the act of investment of that capital to acquire an asset ; (3) However, the business for which an asset of enduring nature is purchased that borrowed capital should not be separate or distinct from the business for the purposes of which the capital is borrowed if deduction under Sec. 10(2)(iii) is to be allowed, and (4) If there is no existence of the business with reference to which the capital is borrowed and the borrowed capital is invested to purchase a new asset of enduring nature, then the interest paid on such borrowing till the asset so purchased goes into production, increases the cost of installation of the said asset, and hence should be treated as capital expenditure and not covered by Section 10(2)(iii) of the Act of 1922 or Sec. 36(l)(iii) of the Act of 1961. (14) The decision of the Apex Court in India Cement Ltd.(supra) was with reference to the borrowings made for the purpose of running business whereas the decision of Challapalli Sugars Ltd.(supra) was with reference to the borrowings which were considered in respect of a situation where the business had not yet commenced. (15) So far as the payment of legal fees for defending the acquisition proceedings in respect of the agriculture land purchased by the assessee we are of the view that an expenditure which is made for creating/completing the title is a capital expenditure. It is only when an expenditure is made for preservation, protection, defend or to maintain an existing title then it can be considered to be a revenue expenditure. The Income-tax Appellate Tribunal has not gone in detail with regard to the nature of the expenditure and has simply proceeded on the assumption that the two businesses are the same. It is only when an expenditure is made for preservation, protection, defend or to maintain an existing title then it can be considered to be a revenue expenditure. The Income-tax Appellate Tribunal has not gone in detail with regard to the nature of the expenditure and has simply proceeded on the assumption that the two businesses are the same. (16) In CIT vs. Prithvi Insurance Co. (8) following tests were laid down by the Apex Court: — "A fair adequate test for determining whether to constitute the same business is furnished by Rowlatt, J. in Scales V. George, Thompson & Co. Ltd. 13 T.C. 83, 89 KB "was there any interconnection, an interlacing, an interdependence between, and a unity embracing, the businesses"? (17) That inter-connection, interlacing, inter-dependence and unity are furnished in this case by the existence of common management, common business organisation, common administration, common fund and a common place of business. (18) In Dalmia Jain vs. CIT (9) it was held by the Apex Court that the litigation expenses incurred by the assessee for the purpose of creating, curing or completing the assessees title to the capital, the expenses incurred must be considered as capital expenditure. If the litigation expenses are incurred to protect the business of the assessee, they must be considered as a revenue expenditure. Since neither the business was in existence nor it could be said that the litigation expenses were to protect the business of the assessee, therefore, the expenditure incurred by the assessee cannot be considered to be a revenue expenditure. (19) In Re Hiralal Kalyanmal,(10) Beaumount, CJ. has observed "It is obvious that mere common ownership of the businesses does not mean that they are merely branches of the same business. It is also I think obvious that the mere fact that the two businesses are of a distinct nature does not necessarily mean that they are distinct businesses. You can have two branches of a multiple store, one selling drugs and the other selling cloth. Nobody would suggest that these two departments constitute two different businesses." (20) In Scales vs. George Thompson & Co. Ltd. (11) the observation of Rowlatt, J. were as under: — "Is there an inter-connection, an inter-lacing, an inter- dependence between, and a unity embracing, the business? Nobody would suggest that these two departments constitute two different businesses." (20) In Scales vs. George Thompson & Co. Ltd. (11) the observation of Rowlatt, J. were as under: — "Is there an inter-connection, an inter-lacing, an inter- dependence between, and a unity embracing, the business? The inter-dependence may be financial, the unity may be unity of management and control." It was held in CIT vs. Prithvi Companys case (supra) by the Apex Court:– "If there was common management, common business organisation, common administration, common fund and common place of business then, one could come to the conclusion that there was interconnection, inter-lacing and interdependence which would mean that it was the same business". The observation of Rowlatt J. in the case of Scales vs. George Thompson and Co. Ltd. (supra) were also taken into consideration where on fact it was found :– "That inter-connection, inter-lacing, inter-dependence and unity are furnished in this case by the existence of common management, common business, common administration, common fund and a common place of business." (21) In Produce Exchange Corporation Ltd. vs. CIT (supra) relied by the Tribunal the matter was with regard to the loss in the sale of shares which was carried forward and set off against the profit of subsequent years from transactions in other commodities. The Tribunal found that there was no element of diversity or distinction or separateness about the transaction in shares. The High Court held that essential matter to be considered was the nature of the two lines of business and not merely their unity of control. The Apex Court reversed the decision of the High Court and came to the conclusion that the decisive test was unity of control and not the nature of the two lines of business. (22) In Standard Refinery and Distillery Ltd. vs. C.I.T. (12) it was held by the Apex Court: — "It was for the appellants to establish that different ventures constitute parts of the same business. (22) In Standard Refinery and Distillery Ltd. vs. C.I.T. (12) it was held by the Apex Court: — "It was for the appellants to establish that different ventures constitute parts of the same business. There is in this case no evidence about unity of control and management, or interrelation of the business, or employment of the same staff to run the business or the possibility of one theatre being closed without effecting the rest of the business." (23) From the various decisions of the Apex Court it would be evident that for the purpose that the burden is on the assessee to establish as to whether the different ventures constitute part of the same business. Sufficient evidence is to be produced about the unity of control and management and inter-relation of the business or employment of the some staff to run the business or the possibility of one after being closed affecting the other business. None of the factors have been taken into consideration and the Tribunal has proceeded simply on the basis of the observation of the Supreme Court without going to the facts of the case. (24) In these circumstances, the reference is returned unanswered and the Tribunal is directed to either take into consideration the evidence at its level or send the case back to the Assessing Authority to take the evidence and then record the finding as to whether the business of film exhibition and that of manufacturing of artificial jewellery was the same business. It will also take into consideration whether before establishment of business of manufacture of artificial jewellery it could be said that any expenditure in relation there to could be considered as business expenditure allowable under Section 37. The reference is returned unanswered. Cost made easy.