Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 1968-69 - Assessee obtained premises on lease for 39 years - In terms of lease agreement, assessee demolished existing construction and constructed new building to suit its business at its own expenses - In any circumstances assessee would not be entitled for any compensation on account of putting up new construction and it should be treated as tenant subject to payment of rent lower than rent prevailing - Assessee claimed said construction expenditure as revenue expenditure - Assessing Officer rejected its claim and treated said expenditure as capital expenditure - Whether since asset created by assessee by spending amounts did not belong to assessee but assessee got only business advantage of using modern premises at a low rent, thus, saving considerable revenue expenditure for next 39 years, said expenditure should be treated as revenue expenditure - Held, yes

Madras Auto Service (P.) Ltd[1998] 99 TAXMAN 575 (SC)AUGUST 12, 1998