JUDGMENT : K.S. Jhaveri, J. 1. By way of this appeal, the revenue has challenged the judgment and order of the Income Tax Appellate Tribunal, Rajkot Bench, Rajkot (For short, "the Tribunal") in ITA No. 308/RJT/1999 dated 31.3.2005. 2. At the time of admitting this Appeal, following questions of law were framed by this Court:- "A. Whether the ITAT is justified in holding that the disallowance of interest expenses of Rs. 8,13,17,574.00 on borrowed funds for modernization/expansion of the business and interest income of Rs. 1,66,38,989.00 earned by temporary deployment of the funds i.e. net sum of Rs. 6,64,78,585.00 concerning the said borrowed funds for modernization/expansion of business by the Assessing Officer is wrong and that the assessee is entitled to allowance of the said net amount of expenses u/s. 36(1)(iii) of the IT Act? B. Whether ITAT is justified in holding that the interest income of Rs. 1,66,38,989.00 on account of temporary deployment of borrowed fund is required to be allowed as deduction by way of separate deduction over and above interest expenditure of Rs. 8,13,17,585.00 allowed as expenditure by the C.I.T.(A)? C. Whether the ITAT is justified in holding that the disallowance of Rs. 6,06,013.00 concerning contribution to National Council or Cement and Building Material made by the Assessing Officer is illegal and that the same is required to be allowed as expenditure allowable u/s. 37(1) of the Act as incurred for the purpose of business? D. Whether the ITAT is justified in holding that the Assessing Officer is not justified in deletion of the sum of Rs. 2,55,33,060.00 being interest on deferred payment of Sales Tax Liability? E. Whether the ITAT is justified in holding that the amount of Rs. 10,32,527.00 being expenditure incurred on polishing and electrification work of office of the assessee at Bombay not allowed by the Assessing Officer being in the nature of capital expenditure is illegal and the assessee is entitled to allowance of the same? F. Whether the ITAT is justified in holding that payment made by the assessee of Rs. 6,00,300.00 to Heritage India Club not allowed as expenditure by the Assessing Officer is illegal and the same is required to be allowed as business expenditure?" 3. F. Whether the ITAT is justified in holding that payment made by the assessee of Rs. 6,00,300.00 to Heritage India Club not allowed as expenditure by the Assessing Officer is illegal and the same is required to be allowed as business expenditure?" 3. At the time of hearing of this appeal, it is submitted that the issues involved in this appeal are covered by various decision of the Apex Court and decisions of this Court and other High Courts. It is submitted that so far as the Questions (A) and (B) is concerned, the same is covered by the decision of the Apex Court in the case of Deputy Commissioner of Income Tax v. Core Health Care Ltd. reported in 298 ITR 194 (SC), wherein it is observed as under:- "8. Interest on moneys borrowed for the purposes of business is a necessary item of expenditure in a business. For allowance of a claim for deduction of interest under the said section, all that is necessary is that firstly, the money, i.e. capital, must have been borrowed by the assessee; secondly, it must have been borrowed for the purpose of business; and, thirdly, the assessee must have paid interest on the borrowed amount [See: Calico Dyeing & Printing Works v. Commr. of Income-tax, Bombay City-II, (1958) 34 ITR 265]. All that is germane is : whether the borrowing was, or was not, for the purpose of business. The expression "for the purpose of business" occurring in Section 36(1)(iii) indicates that once the test of "for the purpose of business" is satisfied in respect of the capital borrowed, the assessee would be entitled to deduction under Section 36(1)(iii) of the 1961 Act. This provision makes no distinction between money borrowed to acquire a capital asset or a revenue asset. All that the section requires is that the assessee must borrow capital and the purpose of the borrowing must be for business which is carried on by the assessee in the year of account. What sub-section (iii) emphasizes is the user of the capital and not the user of the asset which comes into existence as a result of the borrowed capital unlike Section 37 which expressly excludes an expense of a capital nature. The legislature has, therefore, made no distinction in Section 36(1)(iii) between "capital borrowed for a revenue purpose" and "capital borrowed for a capital purpose". The legislature has, therefore, made no distinction in Section 36(1)(iii) between "capital borrowed for a revenue purpose" and "capital borrowed for a capital purpose". An assessee is entitled to claim interest paid on borrowed capital provided that capital is used for business purpose irrespective of what may be the result of using the capital which the assessee has borrowed. Further, the words "actual cost" do not find place in Section 36(1)(iii) of the 1961 Act which otherwise find place in Sections 32, 32A etc of the 1961 Act. The expression "actual cost" is defined in Section 43(1) of the 1961 Act which is essentially a definition section which is subject to the context to the contrary. 9. In the case of Commissioner of Income-tax v. Associated Fibre and Rubber Industries (P) Ltd., (1999) 236 ITR 471, the Division Bench of this Court held as follows: "Even though the machinery has not been actually used in the business at the time when the assessment was made, the same has to be treated as a business asset as it was purchased only for business purposes. In the circumstances, the interest paid on the amount borrowed for purpose of such machinery is certainly a deductible amount." 10. As stated above, the Department contended before us that the judgments of this Court, prior to insertion of Explanation 8 in Section 43(1) of the 1961 Act, has no application to the present case. According to the Department, Section 36(1)(iii) of the 1961 Act being general in nature has to give way to special provisions contained in Explanation 8 to Section 43(1) of the 1961 Act. According to the Department, in none of the earlier judgments this Court has considered the true scope of Explanation 8 to Section 43(1) vis-à-vis Section 36(1)(iii) of the 1961 Act. We find no merit in this contention. Section 43 groups together all provisions in the nature of definitions or interpretations relevant to the computation of income under the head "Profits and Gains of Business". Section 43(1) defines "actual cost". The definition of "actual cost" has been amplified by excluding such portion of the cost as is met directly or indirectly by any other person or authority. Explanation 8 has been inserted in Section 43(1) by Finance Act, 1986 (23 of 1986), with retrospective effect from 1.4.74. Section 43(1) defines "actual cost". The definition of "actual cost" has been amplified by excluding such portion of the cost as is met directly or indirectly by any other person or authority. Explanation 8 has been inserted in Section 43(1) by Finance Act, 1986 (23 of 1986), with retrospective effect from 1.4.74. It is important to note that the word "actual cost" would mean the whole cost and not the estimate of cost. "Actual cost" means nothing more than the cost accurately ascertained. The determination of actual cost in Section 43(1) has relevancy in relation to Section 32 (depreciation allowance), Section 32A (investment allowance), Section 33 (development rebate allowance), and Section 41 (balancing charge). "Actual cost" of an asset has no relevancy in relation to Section 36(1)(iii) of the 1961 Act. This reasoning flows from a bare reading of Section 43(1). Section 43 defines certain terms relevant to income from profits and gains of business and, therefore, the said section commences with the words "In Sections 28 to 41 and unless the context otherwise requires" "actual cost" shall mean the actual cost of the assets to the assessee, reducing by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or authority. In other words, Explanation 8 applies only to those Sections like Sections 32, 32A, 33 and 41 which deal with concepts like Depreciation. The concept of Depreciation is not there in Section 36(1)(iii). That is why the legislature has used the words "unless the context otherwise requires". Hence, Explanation 8 has no relevancy to Section 36(1)(iii). It has relevancy to the aforementioned enumerated sections. Therefore, in our view Explanation 8 has no application to the facts of the present case." 4. The same are also covered by the decision of this Court in Commissioner of Income Tax v. Jayendrakumar Hiralal reported in [2010] 327 ITR 147 (Gujarat), wherein it is observed as under:- "2. While considering the issues raised in these questions, the Tribunal has considered these issues as under:- 3. The same are also covered by the decision of this Court in Commissioner of Income Tax v. Jayendrakumar Hiralal reported in [2010] 327 ITR 147 (Gujarat), wherein it is observed as under:- "2. While considering the issues raised in these questions, the Tribunal has considered these issues as under:- 3. After hearing both the parties, we find the matter stands covered in favour of the assessee by decision of the Tribunal in the case of JCIT v. Deversons Industries Ltd. in ITA No. 2008/Ahd/1999, wherein the Tribunal allowed the claim of the assessee by observing vide discussion in paragraph 14 of its order, which reads as under:- "We take up the matter of examination of Rs. 3,70,000 first. The obligation of the assessee, as an industrial unit, under the law, being only to treat the effluent to the required degree prior to its discharge interest public drainage, the contribution made by it, on the direction of the Hon'ble Gujarat High Court, to contribute towards the laying of the network of pipelines required for the conveyance of the discharge, in view of the high cost the project entail, being outside the financial capacity of the relevant authority, being AMC, Ahmedabad, is only an obligation that it assumes as a responsible citizen, as in its absence, the entire scheme, as sought to be put in place by the said court, to alleviate a continuing hardship/problem, would become unworkable/unfeasible. That, it may have also been motivated, as a part of the group of participating industrial units of the area, to buy peace with the State Industries, or the Pollution Control, Department, or to safeguard themselves from the penal consequences that may visit on account of their violation of the law in the past, though relevant from business stand-point, are irrelevant to the purpose of the nature and scope of the obligation under the law. Rather, if at all, these considerations only go to support its (assessee's) argument of the said contribution being made only to protect its business as a ongoing entity, and thus, its business interest/profitability, with no concomitant financial benefit/interest, so that the expenditure is only a revenue incurred wholly and exclusively for its business. Rather, if at all, these considerations only go to support its (assessee's) argument of the said contribution being made only to protect its business as a ongoing entity, and thus, its business interest/profitability, with no concomitant financial benefit/interest, so that the expenditure is only a revenue incurred wholly and exclusively for its business. As such, we are inclined to agree with the arguments of the learned A.R that the said expenditure is revenue in nature, the only advantage the assessee deriving from the said expenditure being avoidance of protracted litigation and enabling its smooth conduct, and thus, protecting its business profits and assets; it being not charged under law to do so, and thus, is a revenue expenditure allowable in full. In doing so, we are aware that the cost of the pipeline would also include that from the respective polluting unit to the common ETP, which, strictly speaking, lies in the area of responsibility of the discharging unit. However, considering the totality of the facts, where the cost arises only on account of the assessee agreeing, for various business reasons, to participate in a scheme framed by the Hon'ble High Court, as a remedy to a perpetual public hazard i.e. a social cause, the same would form a part and parcel of the envisage project, and thus, the entire expenditure incurred for the purpose of the conveyance of its discharge would be deductible." 4. We find that facts and circumstances in the above case are similar to that of the present appeal under consideration. Therefore, respectfully following the above decision of the Tribunal, we hold that the CIT (A) was justified in allowing the claim of the assessee. His order is, thus, upheld. The CIT (Appeals) as well as the Tribunal has held that assessee has made only a contribution to protect its business as an ongoing entity. Considering the concurrent findings of the CIT (Appeals) as well as the Tribunal, that the assessee has made only a contribution for laying down pipeline for the purpose of carrying effluent discharge, we see no merit in this appeal. The appeal stands dismissed." 5. It is submitted that so far as Question (C) is concerned, the same is covered by the decision of the Rajasthan High Court in the case of Additional Commissioner of Income Tax v. Rajasthan Spg. & Wvg. The appeal stands dismissed." 5. It is submitted that so far as Question (C) is concerned, the same is covered by the decision of the Rajasthan High Court in the case of Additional Commissioner of Income Tax v. Rajasthan Spg. & Wvg. Mills Ltd. reported in [2005] 274 ITR 465 (Rajasthan), wherein it is observed as under:- "[18] in this connection we may notice a recent decision of Supreme Court in Sri Venkata Satyanarayan Rice Mills Contractor Co. v. CIT, (1997) 223 ITR 101 (SC). The case has arisen in like circumstances. A public welfare fund viz., District Welfare Fund was evolved by rice millers in association with District Collector. Each member proposing to export rice was required to deposit a stated amount in the specified bank. He was required to make application for seeking export permit disclosing the amount deposited by him. On such application Andhra Pradesh Government will give the applicant permit. Such contributions were disallowed by the assessing authority as well as by the appellate authorities including Tribunal. High Court too on a reference held such contribution to be against public policy. Reversing the judgment of Andhra Pradesh High Court, the Supreme Court approved the Full Bench decision of Madhya Pradesh High Court in Kuber Singh's case (supra) and held that it correctly spells out the principle relating to allowability of such an expense which has been incurred with a view to the promotion of assessee's business. In coming to this conclusion, the Supreme Court applied the principle laid down by the House of Lords in Atherton's case (supra) and approved by the Supreme Court as discussed above. [19] Keeping in view the aforesaid principle, if we have a close look at the grounds on which the contribution to Export Promotion Fund is denied to the assessee as stated in the order of CIT under Section 263 it reveals that because no part of trust property or its income shall be applied for purposes other than charitable purposes, the objects do not indicate at all that any one of them is directly connected with the business activities of the assessee and that trust is open to anyone so it cannot be said that contribution made to Export Promotion Fund is wholly and exclusively for the business of the assessee. In nutshell charitable purpose of the fund, non-availability of direct benefit, and even third party being beneficiary takes the contribution made to it out of purview of wholly and exclusively for the purposes of business of assessee because benefit of fund is shared by others. [20] All the three grounds independently or cumulatively are not germane for holding the expenses to be wholly and exclusively for the purpose of assessee's business. It is now well-settled as discussed above that it is not necessary that benefit of expenses should flow to business of assessee directly or immediately. The principle in Atherton's case (supra), as approved by the Supreme Court in Eastern Investments Ltd. (supra) and other cases lays down this firmly. It is also not necessary to show that expenses were not profitable or no benefit is actually derived. Nor the voluntary nature of expenditure takes it out of purview of Section 37(1) if it had nexus with the advancement of assessee's business and assessee is motivated to incur expenditure for advancement of such interest. The receipt of actual benefit is also not necessary. [21] it is not in dispute that the assessee is a manufacturer of textiles. The fund is set up to promote export of textiles and other products, manufactured by Bhilwara group of industry. The export of textiles or other products of the assessee does result in advancement of assessee's business interest cannot be disputed. Thus, contribution to fund set up for export promotion of products which is also business, the assessee thus has direct nexus to the advancement of the assessee's business. The fact that the object of Export Promotion Fund is not confined to assessee but is open to all whosoever wants to participate cannot alter the character of expenses incurred by way of contribution to such fund by the assessee from his benefit to other's benefit. The fact that the object of Export Promotion Fund is not confined to assessee but is open to all whosoever wants to participate cannot alter the character of expenses incurred by way of contribution to such fund by the assessee from his benefit to other's benefit. We have noticed that contribution made to even Draught Relief Fund which has nothing to do with assessee's business and was not a fund of which assessee could at all be said to be beneficiary, was held to be an expense incurred wholly and exclusively for the assessee's business as it was incurred to deny indirect benefit to feed the requirement of his business by Madhya Pradesh High Court in Kuber Singh's case (supra) which has been approved by the Supreme Court in Sri Venkata Satyanarayan Rice Mills Contractor Co.'s case (supra) for holding that contribution made to District Export Fund set up by the traders was incurred wholly and exclusively for the purposes of assessee's business because contribution was motivated to advance assessee's own business interest notwithstanding that it was open to others also to secure such benefits by making voluntary contribution to the fund. [22] The principle fully applies to facts of the case." 6. So far as Question (D) is concerned, it is submitted that the same is covered by the decision of this Court in Tax Appeal No. 6 of 1998 decided on 16/6/2010, wherein it is observed as under:- "Revenue's Question No. 1 19. Question No. 1 referred at the instance of Revenue relates to unpaid interest on sales tax which was disallowed by the Assessing Officer invoking provisions of section 43B of the Act, but has been allowed by the Tribunal on the footing that said amount does not partake the characteristic of a statutory liability. 20. The amount of interest has become payable on the basis of communication dated 30th September, 1992 issued by the Finance Department of the State Government under which an arrangement had been worked out between the parties. On behalf of Revenue, it was submitted that the Tribunal had committed an error in holding that the interest was not a statutory liability. The amount of interest has become payable on the basis of communication dated 30th September, 1992 issued by the Finance Department of the State Government under which an arrangement had been worked out between the parties. On behalf of Revenue, it was submitted that the Tribunal had committed an error in holding that the interest was not a statutory liability. That in fact, the interest was statutorily leviable under section 47(4A) of the Sales Tax Act and by virtue of the communication dated 30th September, 1992, only remission had been granted by the State Government under section 55 of the Sales Tax Act. That the said liability could not be treated to be a contractual liability and had to be treated as part and parcel of sales tax payable so as to attract provisions of section 43B of the Act. 20.1 Reading extensively from the communication dated 30th September, 1992, more particularly paragraph No. 5 of the said communication, it was submitted that the said paragraph used the language employed by section 47(4A) of the Sales Tax Act and thus, was a statutory liability. That merely because the rate of interest had been reduced to 12% from the statutory prescribed rate of interest, the nature of liability did not undergo change and Tribunal had committed an error in holding that section 43B of the Act was not applicable. The judgment of this High Court in the case of Shree Digvijay Cement Co. Ltd. v. Commissioner of Income-Tax, (2007) 289 ITR 250 was relied upon in support of the submissions made. 21. On behalf of the assessee, it was submitted that it was not only the rate of interest which was different from the statutory rate of interest but the interest would not partake the character of a statutory liability so as to be equated with tax to attract provisions of section 43B of the Act. That the arrangement worked out under communication dated 30th September, 1992 was not in accordance with the statutory provisions of the Sales Tax Act but was dehors such provisions and the State Government had in exercise of its plenary powers granted certain reliefs to the assessee by way of an arrangement/agreement. Therefore, the impugned order of Tribunal was justified in law. 22. Therefore, the impugned order of Tribunal was justified in law. 22. The reliance on judgment of this High Court in the case of Shree Digvijay Cement Company Limited (supra) by the Revenue would not carry the case of Revenue any further. In the said case, in the first instance, the Court was not called upon to decide the nature of liability. Admittedly, as recorded by the Court "at the outset, it is required to be noted that the assessee claimed deduction of Rs. 7,38,11,883/- under section 43B of the Act on account of interest at the rate of 24% per annum under section 47(4A) of the Gujarat Sales Tax Act on the outstanding sales tax amount." whereas in the facts of the present case, there is a dispute as to whether the interest is payable by virtue of provisions of section 47(4A) of the Sales Tax Act. Secondly, as can be seen from the question which was posed before the High Court, the dispute was as to whether the said amount of interest can be disallowed in the course of making prima facie adjustment under section 143(1)(a) of the Act. Therefore, the observations made in the said judgment would not assist the Revenue. 23. Insofar as remission under section 55 of the Sales Tax Act is concerned, only sub-section (1) of section 55 of the Sales Tax Act empowers the State Government to grant remission as to whole or any part of the tax, penalty or interest payable in respect of any period by any dealer. However, such a remission can be granted by the State Government only if it is necessary to do so in public interest, or to grant concession in case of double taxation, or to redress any inequitable situation. It is nobody's case that in the facts of the present case the State Government made any order recording that a remission in the rate of interest was either necessary in the public interest or was a case of double taxation so as to grant concession, or was required for the purposes of redressing any inequitable situation. Thus, on a plain reading of provisions of section 55 of Sales Tax Act and the language employed by the communication dated 30th September, 1992, it is not possible to accept this contention raised by Revenue. 24. Thus, on a plain reading of provisions of section 55 of Sales Tax Act and the language employed by the communication dated 30th September, 1992, it is not possible to accept this contention raised by Revenue. 24. When one reads the entire communication as a whole document, it becomes clear that the Government of Gujarat agreed to the arrangement stipulated in the said communication about the clearance of arrears of sales tax dues alongwith interest in the manner indicated in the communication subject to the conditions stipulated therein. The petition filed by the assessee before the High Court and which was pending had to be withdrawn by the assessee company with further undertaking not to resort to any litigation with reference to the arrangement communicated in the said letter. The arrangement was to become effective after the case filed by the Company was withdrawn from the High Court and the Company actually paid the first instalment towards down payment. Thus, an arrangement had been arrived at between the parties to put an end to the pending litigation and it is not as if the State Government has granted any remission as contended. The document has to be read as a whole as it stands and it is not possible to import anything in the document. 25. In the circumstances, the finding by the Tribunal that the liability of interest could not be termed to be part and parcel of the sales tax liability so as to attract provisions of section 43B of the Act cannot be considered to be incorrect in law in light of what is recorded hereinbefore. In fact, the entire decision of the Tribunal has proceeded on the appreciation of evidence in the form of communication dated 30th September, 1992 and as to whether the said evidence could be considered to be imposing any statutory liability. The finding recorded by the Tribunal is thus justified in the facts and circumstances of the case considering the communication dated 30th September, 1992." 7. So far as Question (E) is concerned, the same is stated to be covered by the decision of Delhi High Court in Commissioner of Income Tax v. Escorts Finance Ltd. reported in [2006] 205 CTR 574 (Delhi), wherein it is observed as under:- "(3) In CIT v. J.K. Industries (P) Ltd., (1980) 125 ITR 218 (Cal), the Court has held as under : "Mr. Sukumar Bhattacharyya relied upon and cited the decision in the case of Regal Theatre v. CIT, (1966) 59 ITR 449 (Punj) which was considered by the Tribunal. The facts in this case were that the assessee had taken on lease a cinema building with all furnitures and fittings whereunder the lessee could not make any additions or alterations and the lessor had to carry out whitewashing, colour washing and repairs to the building. During the relevant assessment year, in order to cover up a damaged wall, the assessee spent a sum for wooden panelling. The question arose whether the said amount spent as aforesaid would be allowable as a deduction under s. 10(2)(xv) of the Indian IT Act, 1922. On these facts, the Punjab High Court held that the assessee's lease was for a short duration and the life of the panels was such that the panelling could not be treated as an asset of an enduring nature. The High Court compared the putting up of such wooden panelling with plastering and painting of walls and held the expenses incurred were of a revenue nature. In the instant case, the assessee's contention that the wooden panelling did not last long and as such were not an enduring asset has been accepted by the Tribunal. This finding of fact has not been challenged. In view of the aforesaid finding and the decision in Regal Theatre v. CIT (supra) we hold that the expenses incurred by the assessee in putting up the wooden panelling did not result in any enduring benefit to the assessee and, therefore, was deductible as a revenue expenditure." We consider that the amount spent on providing wooden partition, painting of leased premises, carrying out repairs so as to make the premises workable, to replace glasses etc. has to be considered as revenue expenditure. It is for the businessman to see as to in what manner the leased premises is to be maintained and what are the necessary repairs which are required to be done. We consider that all such expenditures which were incurred on painting, polishing of the floor, providing wooden panelling etc. is revenue expenditure and the nature of repairs is not of an enduring character so as to characterise as capital expenditure." 8. We consider that all such expenditures which were incurred on painting, polishing of the floor, providing wooden panelling etc. is revenue expenditure and the nature of repairs is not of an enduring character so as to characterise as capital expenditure." 8. The same is also covered by the decision of this Court rendered in Tax Appeal No. 1796 of 2005 decided on 05/09/2006, wherein it is observed as under:- "The short controversy involved in this appeal is whether the addition of Rs. 66,600/- is capital expenditure or revenue expenditure. The Tribunal has considered this aspect as under: "The next grievance of the assessee relates to confirmation of the disallowance of Rs. 66,600/- being expenditure to the extent it represents paintings and false ceiling of NKM house by considering the same as capital expenditure. We have considered the rival contentions and find from the record that the expenditure was incurred on purchase of paintings with a view to furnish the corporate office of the company. The expenditure did not give the benefit of enduring nature whereas the Assessing Officer considered the expenditure as capital in nature and allow depreciation on it at the rate of 10%. The Hon'ble Gujarat High Court in the case of Indian Ginning and Pressing Co. Ltd. v. CIT, 252 ITR 577, held that it is only where the advantage is in the capital field that the expenditure should be disallowed and if the advantage consists merely in facilitating the assessee's trading operation or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account even though the advantage may endure for indefinite future. In the instant case, the purchase of paintings did not result in advantage of expansion of profit making apparatus and the same are essentially revenue in nature. We, therefore, reverse the findings of the lower authorities and allow this ground of the assessee's appeal." Considering the reason given by the Tribunal that the benefit is not of enduring nature on the expenditure made, no interference is called for. The appeal stands dismissed at the admission stage." 9. So far as Question (F) is concerned, the same is stated to be covered by the decision of this Court in Gujarat State Export Corpn. The appeal stands dismissed at the admission stage." 9. So far as Question (F) is concerned, the same is stated to be covered by the decision of this Court in Gujarat State Export Corpn. Ltd. v. Commissioner of Income Tax reported in [1994] 209 ITR 649 (Gujarat), wherein it is observed as under:- "8. For deciding the question as to whether the expenditure is of capital nature or revenue nature, one of the relevant criteria is whether it is for acquisition of concern or assets or whether the expenditure is for carrying on concern or for running the business. If the aim and object of the expenditure is for carrying on the concern, then it is a revenue expenditure. Hence, in our view, it would be difficult for us to accept the contention of the Revenue that the entrance fee paid by the assessee for getting the membership of the sports club can be termed as capital expenditure. The question as to whether a particular expenditure is a capital expenditure or a revenue expenditure is dealt with in detail by the Supreme Court in the case of Alembic Chemicals Works Co. Ltd. v. CIT, (1989) 177 ITR 377 (SC). The Court referred to various decisions particularly the decision in the case of City of Lond Contract Corporation v. Styles (1887) 2 Tax Cases 239 wherein broad area of distinction is pointed out. It is held in that case that the outlay on the 'acquisition of the concern' would be capital while an outlay in 'carrying on the concern' is revenue. The Court further referred to the following observations in the case of Assam Bengal Cement Companies Ltd. v. CIT, (1955) 27 ITR 34 (SC) : TC 16R. 841: "If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business it is properly attributable to capital and is of the nature of capital expenditure. If, on the other hand, it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits, it is a revenue expenditure. If, on the other hand, it is made not for the purpose of bringing into existence any such asset or advantage but for running the business or working it with a view to produce the profits, it is a revenue expenditure. The aim and object of the expenditure would determine the character of the expenditure whether it is a capital expenditure or a revenue expenditure." Applying the aforesaid test, in our view, it is apparent that, by paying the entrance fee for a sports club, the assessee had no intention to acquire any capital asset or take advantage for the enduring benefit of the business. By commonsense standard, it can be stated that it is for running the business or for bettering the conduct of its business. In the case of Alembic Chemical Works Co. Ltd. (supra), the Court further observed that whether a particular outlay is capital or revenue is required to be determined after taking into consideration various aspects and the relevant criterion is the purpose of the outlay and its intended object and effect, considered in a commonsense way having regard to the business realities. Further, with regard to the test of enduring benefit, the Court observed that in a given case, the test of 'enduring benefit' might break down. For this purpose, the Court relied upon the following observations in the case of CIT v. Associated Cement Companies Ltd., (1980) 172 ITR 257 (SC): "There may be cases where expenditure, even if incurred for obtaining an advantage of enduring benefit, may, nonetheless, be on revenue account and the test of enduring benefit may break down." Applying the aforesaid criterion, in our view, it is apparent that the payment of entrance fee for becoming member of the sports club cannot be termed as a capital expenditure. It is in the nature of an advantage in the commercial sense but it is not an advantage in the capital field. Hence, the Tribunal erred in law in rejecting the claim of the assessee that payment of entrance fee to the Sports Club of Gujarat Ltd. is expenditure of revenue nature and holding that the payment conferred upon the assessee a benefit or an advantage of enduring nature and, therefore, it is expenditure of capital nature. Therefore, question No. 2 requires to be answered in the affirmative for the asst. yr. Therefore, question No. 2 requires to be answered in the affirmative for the asst. yr. 1974-75 in favour of the assessee and against the Revenue." 9.1 Therefore, it is prayed that this appeal may also be disposed of accordingly. 10. Learned advocate for the respondent is not in a position to dispute the aforesaid position. 11. We have heard both the learned counsel and perused the record. Since it is not in dispute that the questions framed for our consideration in this appeal are already answered by the aforesaid decisions, this appeal is also disposed of accordingly. The questions raised for our consideration are answered as per the decisions cited herein above. Accordingly, this appeal is disposed of.