Appeal No 1106 of 1964
Appeal by special leave from the judgment and order dated the October 31 1961 of the Madras High Court in Tax Case No 67 of 1958
A V Viswanatha Sastri R Venkataraman and R Gopala krishnan for the appellant
section T Desai Gopal Singh B R G K Achar and R N Sachthey for the respondent
The Judgment of the Court was delivered by Sikri J
This appeal by special leave is directed against the judgment of the High Court of Judicature at Madras answering the following question of law in favour of the respondent  Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that the sum of rupees 84633 expended by the assessee in obtaining the loan or any part thereof is an allowable expenditure  The facts and circumstances of the case as stated by the Tribunal in the statement of the case are as follows  The appellant India Cements Limited Madras hereinafter referred to as the assessee is a public limited company
The question arises in respect of the assessment year 1950 51 accounting period April 1 1949 to March 31 1950
During the accounting year it obtained a loan of 40 lakhs of rupees from the Industrial Finance Corporation of India
This loan was secured by a charge on the fixed assets of the company
Since Mr section T Desai the learned counsel for the respondent has disputed some facts as stated by the Appellant Tribunal it would be convenient to give these facts in the words of the Appellate Tribunal
It is stated in the statement of the case that the proceeds of this loan was utilised to pay off a prior debt of 25 lakhs due to Messrs A F Harvey Limited and Madurai Mills Limited
It cannot be stated definitely how the balance of 15 lakhs was used but the directors while reporting on the accounts for the year ended 946 31 3 1949 on 4 10 1949 stated that that was utilised towards working funds
 The expenditure of Rs 84633 in connection with this loan was made up of thefollowing items  Stamps 6002300 Registration Fee 1606700 Charges for certified copy of the mortgage deed 2800 Indemnity deed by Essen and Company Limited 1500 Vakil s fee for drafting deed 750000 Legal fees 100000 Total Rs 84633 0 0 The assessee did not charge this expenditure in the profits and loss account for that year
It was shown in the Balance Sheet as mortgage loan expenses
It continued to be so shown till March 31 1952
In the accounts for March 31 1953 this was written off by appropriation against the profits of that year
The Income Tax Officer refused to allow the deduction of Rs 84633 
He observed As per the information furnished by the auditors Rs 25 lakhs of the loan was to be paid to Messrs A F Harvey Limited and Mathurai Mills Limited in discharge of the amount borrowed from them and utilised on the capital assets of the company
Though in the Company s books the amount of Rs 84633 was not charged to revenue but capitalised and carried forward in the Balance Sheet for purposes of income tax the Company s auditors claim the same as an admissible item of revenue expenditure He held that the expenditure was incurred in obtaining capital and should be distinguished from interest on borrowed capital which was alone admissible as a deduction under section 10 2 iii
According to him section 10 2 xi specifically excludes from consideration any item of capital expenditure
He further held that the case was not distinguishable from the decision in The Nagpur Electric Light and Power Co vs Commissioner of Income tax Central Provinces1
The Appellate Assistant Commissioner agreed with the Income Tax Officer
The Appellate Tribunal distinguished the case of Nagpur Electric Light and Power Co 1 947 vs Commissioner of Income Tax1 on the ground that in the Nagpur Electric Light1 case money was expended for obtaining capital
It observed as follows Here we find the position to be different
A study of the balance sheets of the company as at 31 3 1949 discloses the fact that the paid up capital was sufficient to cover the entire capital outlay of the company and that the further borrowal of Rs 25 lakhs was for aug menting the working
funds of the company
It appears to us that even at that early stage the money was borrowed and used not for capital purposes but for augmenting the working funds of the company
We therefore consider that the whole of the mortgage loan was used firstly to discharge the loan of Rs 25 lakhs and the balance for working funds and as such the whole of the amount was purely for the purposes of augmenting the working capital of the company and that it could not be stated that it was used for capital purposes
In this view of the matter we hold that the money expended in obtaining the loan is an allowable expenditure The High Court after noticing the findings of the Income Tax Officer and the Tribunal preferred the findings of fact made by the Income Tax Officer
It observed At this stage we may point out that the conclusion reached by the Tribunal that the money was borrowed only for working expenses and not for capital investment proceeded on an inference based upon the balance sheet
The Tribunal did not investigate how the sum of Rs 25 lakhs earlier borrowed from A H Harvey and Madurai Mills Ltd was actually utilised
Though in the order of the Income tax Officer it is found stated that that amount was utilised on the capital assets of the company and that statement was based on the authority of the information furnished by the auditors of the assessee the Tribunal either overlooked or ignored this circumstance
In the face of the statement so recorded by the Income tax Officer the Tribunal does not appear to have been justified in relying upon inferences in ascertaining whether the earlier borrowal was on capital or revenue account 16 ITC 28
948 The High Court after reviewing various cases observed  If we ask for what purpose the expenditure in the present case was incurred the only answer must be that it was incurred for the purpose of bringing into existence an asset in the shape of borrowing these Rs 40 lakhs
The further question would then be whether this asset or advantage was not for the enduring benefit of the business and whether the expenditure incurred was one which was incurred once and for all
The answer to both questions would again be in the affirmative
It is true that the borrowed money has to be repaid and it cannot be an enduring advantage in the sense that the money becomes part of the assets of the company for all time to come
But it certainly is an advantage which the company derives from the duration of the loan and undoubtedly it could not have been for any purpose other than an advantage to the business that the borrowing was made
That it is not enduring in the sense that the borrowing has to be repaid after a short or long period as it were cannot affect the conclusion that it was nevertheless an asset or an advantage that was secured
Viewed in the light of the tests adumbrated in the above decision Assam Bengal Cement Co Ltd vs Commissioner of Income Tax1 it seems to us that the expenditure must be regarded as capital expenditure
As the facts of the case which we have set out earlier indicate there can be no doubt that at least to the extent of Rs 25 lakhs that amount was expended for purposes of a capital nature clearly in order to bring into existence capital assets
We have also pointed out that though it was vaguely stated by the Tribunal that the other sum of Rs 15 lakhs was utilised as working funds there seems to be no material whatsoever before the Tribunal to justify its coming to that conclusion The learned counsel for the assessee company Mr A V Viswanatha Sastri urges that the expenditure is admissible as a deduction under section 102 xv of the Act
He says that the High Court erred in holding that the expenditure was made to acquire any asset or advantage of an enduring nature within the test laid down by Viscount Cave and approved by this Court in Assam Bengal Cement Co Ltd vs Commissioner of Income Tax1
He 1 949 further says that what was secured by the expenditure was a loan and in India money expended in raising a loan whether by means of a debenture or a mortgage and whether you call it a loan capital or not is not an expenditure in the nature of capital expenditure
He further submits that the expenditure was expended wholly and exclusively for the purpose of the business of the company
The learned counsel for the revenue Mr section T Desai supports the reasoning of the High Court
He says that the High Court was right in preferring the findings of the Income Tax Officer on the ground that there was no material for the finding made by the Appellate Tribunal and the finding was based on surmises and material evidence was ignored
He says that the High Court in a reference is entitled to ignore any findings of fact made by the Appellate Tribunal if those findings are vitiated
In the alternative he says that the question referred is wide enough to include the question whether there was any material for the finding of the Appellate Tribunal
On the merits he contends that expenditure takes the colour from the thing on which the expenditure is made
If the money is spent to obtain capital then the expenditure assumes the nature of capital expenditure but if the money is spent to obtain raw materials then the expenditure takes the colour of revenue expenditure
He further says that the borrowed money is an enduring asset and any expenditure made to obtain this money falls within the test laid down by Viscount Cave and approved by this Court
A number of cases have been referred to during the hearing of the case by both the counsel but we do not propose to refer to all of them
We must start first with the cases decided by this Court and see what principles have been laid down for distinguishing revenue expenditure from expenditure in the nature of capital expenditure and especially those cases which dealt with similar problems
We will first consider State of Madras V G J Ceolho1
This was not a case arising under the Indian Income Tax Act but under the Madras Plantations Agricultural Income Tax Act 1955 in which a section exactly similar to section 10 2 xv existed
In brief the facts in that case were that the assessee had borrowed money for the purpose of purchasing the plantations and he claimed that in computing his agricultural income from these plantations the entire interest paid by him on moneys borrowed for the purpose of purchasing the plantation should be deducted as expenditure under section 5e of the Act
In 1 19648 SCR 60 1  950 the Madras Act there was no provision similar to section 102 iii of the Act and thus interest was not expressly deductible as an allowance
This Court applied the test formulated by Viscount Cave L C in Atherton vs British Insulated and Helsby Cables Ltd1 and approved by the Court in Assam Bengal Cement Co Ltd vs Commissioner of Income Tax1 and held that the payment of interest was a revenue expenditure
It observed that no new asset is acquired with it no enduring benefit is obtained
Expenditure incurred was part of circulating or floating capital of the assessee
In ordinary commercial practice payment of interest would not be termed as capital expenditure
 This Court further held that the expenditure was for the purpose of business
Mr Desai tried to distinguish that case on the ground that what was at issue was interest on loan and not expenditure incurred for obtaining the loan
In our opinion there is no justification for drawing this distinction in India
As observed by Lord Atkinson in Scottish North American Trust vs Farmer1 the interest is in truth money paid for the use or hire of an instrument of their trade as much as is the rent paid for their office or the hire paid for a typewriting machine
It is an outgoing by means of which the Company procured the use of the thing by which it makes a profit and like any similar outgoing should be deducted from the receipts to ascertain the taxable profits and gains which the Company earns
Were it otherwise they might be taxed on assumed profits when in fact they made a loss
 It will be remembered that there was no section like section 102 iii of the Act in the English Income Tax Act
On the other hand there were certain rules prohibiting the deduction in respect of any capital withdrawn from or any sum employed or intended to be employed as capital in such trade  or any interest which might have been made if any such sums as aforesaid had been laid out at interest Lord Atkinson first held in that case that the express prohibitions did not apply to the facts of the case and then proceeded to discuss general principles
These observations show that where there is no express prohibition an outgoing by means of which an assessee procures the use of a thing by which it makes a profit is deductible from the receipts of the business to ascertain taxable income
On the facts of this case the money secured by the loan was the thing for the use of which this expenditure was made
In principle apart from any statutory provisions we see no distinction between interest in respect of a loan and an expenditure incurred for obtaining the loan
1 21955 1 SCR 972  35 TC 693 at 707
951 Mr Desai urges that these observations of Lord Atkinson should be limited to a case where temporary borrowings are made
It is true that the House of Lords was dealing with the case of a company and the moneys that were borrowed were of a temporary character
But this fact was only relied on to hold that the moneys secured were not capital  within rule 3 of First Case section 100 5 and 6 Vic
35 of the Income Tax Act 1842 for Lord Atkinson observed at p 706 
it appears to me simply amounts to this that the word capital must in this rule be held to bear a wholly artificial meaning differing altogether from the ordinary signification though there be no context in the clause requiring that there should be given to it a meaning different from that which it bears in ordinary commercial transactions He then referred to the decision in Bryon vs The Metropolitan Saloon Omnibus Company1 to show that the borrowing by a joint stock company of money by the issue of debentures does not amount to an increasing of the capital of the company
In Bombay Steam Navigation Co Ltd vs Commissioner of Income Tax2 this Court again examined the question of distinguishing between capital expenditure and revenue expenditure
This Court first held that on the facts of the case cl
iii of section 102 did not apply because the assessee in that case had agreed to pay the balance of consideration due by the purchaser and this did not in truth give rise to a loan
Then Shah J observed  Whether a particular expenditure is revenue expenditure incurred for the purpose of business must be determined on a consideration of all the facts and circumstances and by the application of principles of commercial trading
The question must be viewed in the larger context of business necessity or expediency
If the outgoing or 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 earing process and not for acquisition of an asset or a right of a permanent character the possession of which is a condition of the carrying on of the business the expenditure may be regarded as revenue expenditure  1 3 DG and J 123
2   L8Sup
Cl63 14 952 We will now briefly deal with relevant decisions of the High Courts
The first case referred is In re Tata Iron and Steel Company Ltd1 In that case the Tata Iron and Steel Co Ltd had incurred an expenditure of Rs 28 lakhs as underwriting commission paid to underwriters on an issue of 7 lakhs preference shares of Rs 100 each and the company claimed to deduct this amount as expenses under section 9 2 ix of the Indian Income Tax Act VII of 1918
Macleod CJ observed If it is admitted that the cost of raising the original capital cannot be deducted from profit after the first year it is dffficult to see how the cost of raising additional capital can be treated in a different way
Expenses incurred in raising capital are expenses of exactly the same character whether the capital is raised at the flotation of the company or thereafter  The Texas Land and Mortgage Company vs William Holtham 2
He further observed that as long as the law allows preliminary expenses and goodwill to be treated as assets although of an intangible nature the money so spent is in the nature of capital expenditure just as much as money spent in the purchase of land and machinery The Chief Justice accordingly held that Rs 28 lakhs could not be treated as expenditure not in the nature of capital expenditure solely incurred for the purpose of earning the profits of the company s business
Shah J also came to the same conclusion and he thought that the ratio decidendi in Texas Land and Mortgage Company vs William Holtham 2  and the principles underlying the decision in Royal Insurance Company vs Watson1 lent support to this conclusion
At this stage it would be convenient to consider the Case of Texas Land and Mortgage Company vs William Holtham 2 relied on in this decision
We have already mentioned that the statute law in England is different from the law in India and the observations of the learned Judges in the English cases must be appreciated in the light of the background of the English Income Tax Act
In this case a mortgage company had raised money by the issue of debentures and debenture stock and incurred expenses for the issue of mortgage and placing of such debentures and debenture stock
The Company claimed to deduct these expenses but the High Court held that the expenses could not be deducted under Schedule D of the English Income Tax Act as trading ex 1 3  2 953 penses
Mathew J gave the following reasons for disallowing the claim The amount paid in order to raise the money on debentures comes off the amount advanced upon the debentures and therefore is so much paid for the cost of getting it but there cannot be one law for a company having sufficient money to carry on all its operations and another which is content to pay for the accommodation
This appears to me to be entirely concluded by the decision of yesterday
Anglo Continental Guano Works vs Bell1
In the course of arguments Cave J had remarked It is only so much capital
A man wants to raise pound 1 00000 of capital and in order to do that he has to pay pound 4000
That makes the capital pound 96000
That is all
 In reply to the argument of Finlay QC that the capital of the company properly so called is the share capital Cave J remarked  To the extent that you borrow you increase the capital of the company In our opinion if one keeps in mind the background of the English Income Tax Act the observations reproduced above have no relevance to cases arising under the Indian Income Tax Act
In face of rule 3 Case 1 section 100 5  6 Vict
35 prohibiting the deduction of any expenditure in respect of any sum employed or intended to be employed as capital Mathew and Cave JJ
were only concerned with the question whether the amount secured by debentures and the amount obtained by the issue of debentures and debenture stock could be called capital employed or intended to be employed within the meaning of this rule
Rightly or wrongly the English Courts have held that the amount obtained by the issue of debentures is capital employed within the meaning of the rule but this does not give us any guidance in interpreting the words capital expenditure  occurring in section 10 2 xv of the Act
In our opinion the Bombay High Court was wrong in relying on Texas Land and Mortgage Company vs William Holtham2
But we do not say that the Tata Iron and Steel 1 2 954 Co 1 case was wrongly decided
Obtaining capital by issue of shares is different from obtaining loan by debentures
In Nagpur Electric  Light Co vs Commissioner of Income Tax1 the Court of the Judicial Commissioner Nagpur held that expenses for raising debenture loan required for changing the system of supplying current from DC to AC and for discharging a prior loan was not allowable as deduction of the company s assessable income
The Judicial Commissioner followed the case of Texas Land and Mortgage Company vs William Holtham3 and In re Tata Iron and Steel Company Ltd1
After referring to these two cases the only additional reason given was that apart from authority it seems to us to stand to reason that money expended in obtaining capital must be treated as capital expendiure With great respect we must hold that this case was wrongly decided
The Kerala High Court in Western India Plywood Ltd vs
Commissioner of Income Tax Madras4held that the expenditure incurred by the company a capital expenditure and was 102xv
The High Court Trust Company vs Jackson5 Du1 and some other cases Madras4 held that the expenditure raise a loan by debenture was therefore not deductible under section relying on European investment and Ascot Gas Water Heaters vs drew a distinction between the borrowing of capital and securing merely temporary or day to day accommodation or banking or trading facilities
According to the High Court the expenses for borrowing capital could not be treated as revenue expenditure
This distinction may be valid in English Law but we are unable to appreciate how the distinction is valid under the Indian Income Tax Act
As the decision is mainly based on this distinction and relies inter alia on In re Tata Iron and Steel Co Ltd and Nagpur Electric and Light Co vs Commissioner of Income Tax 2 we must with respect hold that the case was wrongly decided
In Vizagapatnam Sugars and Refinery Ltd vs Commissioner of Income Tax the Andhra Pradesh High Court relying on Texas Land and Mortgage Company V William Holtham3 and the decision in Western India Plywood Ltd vs CIT Madras4 held that on the facts and circumstances of that case brokerage and commission of four annas on every maund of sugar paid by 2 3 1 4 5 6 7 955 the assessee company was not revenue expenditure but capital expenditure
In our opinion the derision as far as the brokerage was concerned was wrong but we do not say anything in this case with respect to the decision as far as the commission on sale of goods was concerned
The Calcutta High Court examined the question in great detail in Sri Annapurna Cotton Mills Ltd vs Commissioner of Income Tax1 Bachawat J held that the loan of Rs 10 lakhs obtained by the company was an asset or advantage for the enduring benefit of the business of the assessee
He placed reliance on a number of casessome of which we have already considered
But we are unable to agree that a loan obtained can be treated as an asset or advantage for the enduring benefit of the business of the assessee
A loan is a liability and has to be repaid and in our opinion it is erroneous to consider a liability as an asset or an advantage within the test laid down by Viscount Cave and approved and applied by this Court in many cases
Sinha J after referring to a number of cases felt that the raising of capital by issue of debentures was a recognised mode of raising capital and he felt that the decided cases had laid down the proposition that borrowing money by the issue of debentures was an acquisition of capital asset and that any commission or expenditure incurred in respect thereof was of a capital nature and not to be considered as in the nature of revenue
He was impressed by the fact that not a single case to the contrary was brought to his notice
But we have to decide the case on principle and with respect it seems to us that he erred in treating the loan as equivalent to capital for the purpose of section 102 xv of the Act
In section F Engineer vs Commissioner of income Tax 2 the Bombay High Court held that the expenditure incurred for raising loan for the carrying on of a business cannot in all cases be regarded as an expenditure of a capital nature
On the facts of the case they held that as construction and sale of the building was the sole business of the firm and the building was its stock intrade and the loan was raised and used wholly for the purpose of acquiring this stock in trade and not for obtaining any fixed assets or raising any initial capital or for expansion of the assessee s business the expenditure incurred for the raising of loan was not an expenditure of capital nature but revenue expenditure
Although the conclusion of the High Court was correct we are not able to agree with the principle that the nature of the expenditure incurred in raising a loan would depend upon the nature and purpose of 1 2 956 the loan
A loan may be intended to be used for the purchase of raw material when it is negotiated but the company may after raising the loan change its mind and spend it on securing capital assets
Is the purpose at the time the loan is negotiated to be taken into consideration or the purpose for which it is actually used  Further suppose that in the accounting year the purpose is to borrow and buy raw material but in the assessment year the company finds it unnecessary to buy raw material and spends it on capital assets
Will the income tax officer decide the case with reference to what happened in the accounting year or what happened in the assessment year  In our opinion it was rightly held by the Nagpur Judicial Commissioner in Nagpur Electric Light and Power Co vs Commissioner of Income Tax1 that the purpose for which the new loan was required was irrelevant to the consideration of the question whether the expenditure for obtaining the loan was revenue expenditure or capital expenditure
To summarise this part of the case we are of the opinion that a the loan obtained is not an asset or advantage of an enduring nature b that the expenditure was made for securing the use of money for a certain period  and c that it is irrelevant to consider the object with which the loan was obtained
Consequently in the circumstances of the case the expenditure was revenue expenditure within section 102xv
The last contention of Mr Desai is that even if it is revenue expenditure it was not laid out wholly and exclusively for the purpose of business
Subba Rao J reviewed the case law in Commissioner of Income Tax vs Malayalam Plantation1 and observed as follows  The expression for the purpose of the business is wider in scope than the expression for the purpose of earning profits
 Its range is wide  it may take in not only the day to day running of a business but also the rationalisation of its administration and modernization of its machinery it may include measures for the preservation of the business and for the protection of its assets and property from expropriation coercive process or assertion of hostile tide it may also comprehend pay ment of statutory dues and taxes imposed as a precondition to commence or for carrying on of a business it may comprehend many other acts incidental to the carrying on of a business 1 2  957 Mr Desai says that the act of borrowing money in this case was not incidental to the carrying on of a business
We are unable to accept this contention
In Eastern Investments Ltd vs Commissioner of Income Tax this Court held that the Eastern Investments Ltd an investment company when it borrowed money on debentures the interest paid by it was incurred solely for the purpose of making or earning such income profits or gains within the purview of section 122 of the Indian Income Tax Act
It held on a review of the facts that the transaction was voluntarily entered into in order indirectly to facilitate the running of the business of the company and was made on the ground of commercial expediency
This case in our opinion directly covers the present case although Mr Desai suggests that the case of an investment company stands on a different footing from the case of a manufacturing company
In some respects their position may be different but in determining the question whether raising money is incidental to a business or not we cannot discern any difference between an investment company and a manufacturing company
We may mention that in that case this Court was not considering whether the expenditure was in the nature of a capital expenditure or not because it was agreed all through that the expenditure was not in the nature of capital expenditure and the only question which this Court dealt with was whether the expenditure was incurred solely for the purpose of making or earning income profits or gains
The case of Dharamvir Dhir vs Commissioner of Income Tax1 also supports the conclusion we have arrived at on this part of the case
It was held in that case that the payment of interest and a sum equivalent to 1116th of the profits of the business of the assessee in pursuance of an agreement for obtaining loan from the lender were in a commercial sense expenditure wholly and exclusively laid out for the purpose of the assessees business and they were therefore deductible revenue expenditure
Before we conclude we must deal with the point raised by Mr Sastri that the High Court erred in law in preferring the findings of the Income Tax Officer to that of the Appellate Tribunal
It is not necessary to decide this question but it seems to us that in a reference the High Court must accept the findings of fact made by the Appellate Tribunal and it is for the person who has applied for a reference to challenge those findings first by an application under section 661
If he has
failed to file an application under 1 2   958 S661 expressly raising the question about the validity of the findings of fact he is not entitled to urge before the High Court that the findings are vitiated for one reason or the other
To conclude we hold that the expenditure of Rs 84633 was not in the nature of capital expenditure and was laid out or expended wholly and exclusively for the purpose of the assessee s business
The answer to the question referred therefore must be in the affirmative
The appeal is allowed the judgment of the High Court set aside and the question referred answered in the affirmative
The appellant will have its costs incurred here and in the High Court
Appeal allowed


Summary:
During the accounting period relevant for the assessment year 1950 51 the appellant company obtained a loan of 40 lakhs of rupees from the Industrial Finance Corporation of India
The loan was secured by a charge on the fixed assets of the company
A sum of Rs 84633 was shown in the Balance Sheet for the said accounting year as mortgage loan expenses the sum was not charged as expenditure in the profit and loss account
In the accounts for the accounting year ending March 31 1953 this sum was written off by appropriation against profits of that year
The Income tax Officer disallowed the deduction he held that the expenditure was incurred in obtaining capital and should be distinguished from interest on borrowed capital which alone was admissible as a deduction under section 102iii
In his view the expenditure was of a capital nature and therefore not admissible under section 102xv either
After intermediate proceedings the High Court in reference gave a finding upholding the view of the Income tax Officer
The appellant by special leave came to this Court
It was contended on behalf of the appellant that  1 the expenditure in question was not incurred to acquire any asset or advantage of an enduring nature 2 it was applied wholly and exclusively for the purposes of the business and 3 was admissible as a deduction under section 10 2 xv
HELD  In the circumstances of the case the expenditure in question was revenue expenditure within section 102xv
iWhen there is no express prohibition an outgoing by means of which an assessee procures the use of a thing by which it makes a profit is deductible from the receipts of the business to ascertain taxable income
On the facts of the instant case the money secured by the loan was the thing for the use of which this expenditure was made
In principle apart from any statutory provisions there is no distinction as drawn by the Income tax Officer between interest in respect of a loan and an expenditure incurred for obtaining the loan
950 G H iiA loan obtained cannot be treated as an asset or advantage for the enduring benefit of the business of the assessee
A loan is a liability and has to be repaid and it is erroneous to consider a liability as an asset or an advantage
955 C iiiThe nature of the expenditure incurred in raising a loan cannot be made to depend on the nature and purpose of the loan
A loan may be intended to be used for the purchase of raw material when it is negotiated but the company may after raising the lo an change its mind and spend it on securing capital assets 955 11 956 B 945 ivThe loan was voluntarily entered into in order to facilitate the running of the business of the company and it could not be said that it was not laid out wholly and exclusively for the purpose of the business
958 B Case law considered