Summarize the following court judgment. ivil Appeal No. 512 (NT) of 1975. From the Judgment and Order dated 15.11.1973 of the Bombay High Court in Income Tax Reference No. 15 of 1964. S.C. Manchanda	 K.C. Dua and Ms. A. Subhashini for the Appellant. Harish Salve	 Mrs. A.K. Verma and D.N. Misra for the Respondents. The Judgment of the Court was delivered by KANIA	 J. This is an appeal	 on a certificate given under Section 66(A)(ii) of the Indian Income tax Act	 1922	 against a judgment and order of a Division Bench of the Bombay High Court. The appeal is preferred by the Commissioner of Income tax and the assessee	 the Associated Cement Companies Ltd. is the respondent. The judgment against which the appeal is directed was rendered on a reference under Section 66(1) of the Indian Income tax Act	 1922. The question referred to the Court for consideration was as follows: "Whether on the facts and in the circumstances of the case	 the expenditure of Rs.2	09	459	 or any portion thereof	 incurred by the company in the accounting period relevant to the assessment period 1959 60 was allowable as deduction in determining the profits of the company for the assessment year 1959 60." The relevant facts are as follows: The assessee	 the Associated Cement Companies Ltd. has a chain of factories manufacturing cement all over the country. The assessment year in question is the year 1959 60 and the corresponding previous year was ended on 31st July	 1958. One of the factories of the assessee was situated at Shahabad	 which is now in the State of Karnataka	 but was at the relevant time forming part of the then State 920 of Hyderabad. In September	 1956	 the Government of Hyderabad had decided to include the area on which the said factory at Shahabad was situated within the municipal limits of the Shahabad Town Municipality. A tripartite agreement between the Government of Hyderabad	 the assessee company and the Municipality was arrived at on 30th October	 1956 between the aforesaid three parties. Under the agreement	 the assessee undertook to supply water to the Shahabad town and village. It further agreed to put up a high tension electric transmission line and to supply electricity for the street lighting of the Shahabad town. It also agreed to concrete free of charge the existing main road from the factory upto the railway station via the main bazar. During the relevant previous year	 the only work done was with respect to provision of water supply to the said town and village. Under the agreement	 the assessee initially agreed to supply certain quantity of water to the Shahabad town at a concessional rate and for the purpose of such supply the assessee company was to undertake and complete at its own cost the water supply scheme for the town and village	 involving laying of the main water pipelines. The assessee company was to be the owner of the pipelines	 installations and other accessories pertaining to the water supply lying within the company 's premises and on the land a little outside the premises. The Shahabad Municipal Committee was to take over possession of the remaining pipelines	 installations and accessories and it was declared to be the owner thereof. These pipelines	 installations	 etc. had to be maintained by the Minicipal Committee in future. Under Clause 23	 in consideration of the assessee company having agreed to provide these amenities	 supply and services	 the Govt. of Hyderabad undertook not to include any of the properties of the company comprising the cement factory	 the main workshop	 the housing colony	 quarries and the limestone bearing lands within the limits of the Shahabad Minicipality or the village panchayat or like body for a period of fifteen years from the date of the agreement. According to the assessee	 a sum of Rs.2	09	459 was spent during the year of account under this agreement and this amount pertained to the laying of pipelines	 installations and accessories of which the Shahabad Municipality became the owner under the agreement and this amount was claimed as a deduction. The Income tax officer disallowed this amount	 holding that it was a capital expenditure on the basis that as a result of this expenditure the company derived an advantage of an enduring nature	 namely that it would not have to pay municipal taxes for a period of fifteen years. On an appeal by the Company	 the Appellate Asstt. Commissioner allowed the deduction 921 holding that the amount was the payment of a composite sum of the revenue outgoings for the following 15 years. The Revenue preferred an appeal to the Income tax Appellate Tribunal. The Income tax Appellate Tribunal passed an order directing the Income tax officer to scrutinize the expenditure and allowed the deduction of the expenditure to the extent that it did not result in the company becoming the owner of any asset. Before the High Court it was contended on behalf of the company that the entire amount of Rs.2	09	459 pertained to expenditure on pipelines installations and other accessories which under the agreement came to ownership of the Shahabad Town Municipality and did not pertain to any increase of the assets of the company. The Division Bench which decided the reference has pointed out that it had not been disputed by the Revenue before the Tribunal that the entire expenditure concerned was laid out for the purpose of business and the only question was whether it was capital expenditure or revenue expenditure. The only ground on which the claim of the assessee for deduction of the said expenditure under Section 10(2) (xv) of the Indian Income tax Act was resisted that it was capital expenditure. After exhaustively considering several decisions of the Supreme Court and several English decisions	 the Division Bench of the Bombay High Court came to the conclusion that the expenditure in question was revenue expenditure and was liable to be allowed as deduction. On the basis of these conclusions the Bombay High Court decided the question referred in their affirmative and in favour of the assessee. In the judgment appealed against the learned Judges have referred to the dictum of Viscount Cave L.C. in Atherton vs British Insulated and Helsby Cables Ltd.	 [1924] 10 Tax Cases 155	 192 which runs as follows: "But when an expenditure is made	 not only once and for all	 but with a view to bringing into existence an asset or an advantage for the enduring benefit of a trade. I think that there is very good reason (in the absence of special circumstances leading to an opposite conclusion) for treating such an expenditure as properly attributable not to revenue but to capital." The Division Bench further pointed out that this dictum was stated with approval by this Court in Assam Bengal Cement Co. Ltd. vs Commissioner of Income tax	 where this 922 Court inter alia approved the decision of a Full Bench of the Lahore High Court in Banarasidas Jagannath in re (F.B.) holding that expenditure may be treated as properly attributable to capital when it is made not only once and for all	 but with a view to bringing into existence an asset or an advantage for enduring benefit of the trade. If	 on the other hand	 what is got rid of by lump sum payment is an annual business expense chargeable against revenue	 the lump sum payment should equally be regarded as a business expenses	 but if the lump sum payment brings in a capital asset	 then that puts the business on another footing altogether. The Division Bench also took into account the fact that the assessee was already running a cement factory at Shahabad and it was not as if the expenditure incurred was in connection with starting of a new business. Mr. Manchanda	 learned counsel for the appellant has raised only two contentions before us. The first contention was that	 since	 as a result of the expenditure incurred	 certain water pipelines were laid which could be regarded as capital assets the expenditure could only be regarded as capital expenditure. In our view	 there is no substance in this contention. It is true that certain water supply lines did come to be laid as a result of the expenditure incurred	 but the facts on records	 which we have referred to above	 clearly show that these water pipelines on which the expenditure in question was incurred were not assets of the assessee	 but assets of the Shahabad Municipality and hence it was not as if the expenditure resulted in bringing into existence any capital asset for the company. The only advantage derived by the assessee by incurring the expenditure was that it obtained an absolution or immunity	 under normal conditions	 from levy of certain municipal rates and taxes and charges. In view of this the first contention of Mr. Manchanda must be rejected. The next submission made by Mr. Manchanda was that the advantage of not being liable to pay municipal rates	 taxes	 etc. which the assessee company secured by reason of making the expenditure in question was for a period of fifteen years and hence it could be said to be an advantage of an enduring nature	 so that the expenditure incurred in acquiring the same would be regarded as capital expenditure. In our view it is difficult to accept this submission either. As observed by the Supreme Court in the decision in Empire Jute Co. Ltd. vs Commissioner of Incometax	 [1980] 124 I.T.R. SC p. 1 that there may be cases where expenditure	 even if incurred for obtaining an advantage of enduring benefit	 may	 none 923 the less	 be on revenue account and the test of enduring benefit may break down. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principles laid down in this test. What is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on an application of this test. If the advantage consists merely in facilitating the assessee 's trading operations or enabling the management and conduct of the assessee 's business to be carried on more effectively or more profitably while leaving the fixed capital untouched	 the expenditure would be on revenue account	 even though the advantage may endure for an indefinite future. In that case the appellant	 a company carrying on the business of manufacture of jute	 was a member of the Indian Jute Mills Association	 which was formed with the objects	 inter alia	 of protecting the trade of its members	 including imposing restrictive conditions on the conduct of the trade and adjusting the production of the mills of its members. A working time agreement was entered into between the members restricting the number of working hours per week for which the mills were entitled to work their looms. Clause 4 of the working time agreement provided that no signatory shall work for more than 45 hours per week. Clause 6(b) provided that the signatories shall be entitled to transfer	 in part or wholly	 their allotment of hours of work per week to any one or more of the other signatories. Under this clause the appellant purchased "looms hours" from four other mills for the aggregate sum of Rs.2	03	255 during the previous year relevant to the assessment year 1960 61 and claimed to deduct that amount as revenue expenditure. The Tribunal held that the expenditure incurred by the appellant was revenue in nature and hence deductible in computing the appellant 's profits. The High Court reversed this decision	 but on appeal	 the Supreme Court allowed expenditure as deductible expenditure on the basis of the principle set out earlier. If this principle is applied to the facts of the case before us	 what we find is that the advantage which was secured by the assessee by making the expenditure in question was the securing of absolution or immunity from liability to pay municipal rates and taxes under normal conditions for a period of fifteen years. If these liabilities had to be paid	 the payments would have been on revenue account and hence the advantage secured was in the field of revenue and not capital. As a result of the expenditure incurred	 there was no addition to the capital assets of the assessee company and no change in its capital structure. The pipelines	 etc. which might have been regarded as capital assets and which came into existence as a result of the expenditure incurred did not belong to the assessee company but to the municipality. In these circumstances	 924 applying the principles laid down in Empire Jute Co. 's case the expenditure is clearly liable to be allowed as deductible from the profits under Section 10(2) (xv) of the Indian Income tax Act. In the result	 the appeal fails and is dismissed with costs. S.L. Appeal dismissed.

This was an appeal by certificate under Section 66(A)(ii) of the Indian Income tax Act against the judgment of the Bombay High Court on a reference of the question whether expenditure incurred by the company in the accounting period relevant to the assessment period was allowable as deduction in determining the profits of the company for the assessment year. The assessee respondent had a factory at Shahabad. Under a tripartite agreement between the government	 the assessee and the Municipality of Shahabad	 the assessee had undertaken to supply water and electricity to Shahabad and to concrete the road from the factory to the railway station. Under clause 23	 in consideration of these amenities to be provided by the assessee company	 the Government undertook not to include any properties of the company within the limits of Shahabad Municipality	 etc. for a period of fifteen years from the date of the agreement. According to the assessee	 certain expenditure was incurred during the year of account under the said agreement	 on the laying of pipelines	 installations and accessories of which the Shahabad Municipality had become the owner under the agreement	 and this amount was claimed as deduction. The Income tax Officer disallowed the amount. On appeal by the Company	 the Appellate Assistant Commissioner allowed the deduction. The Revenue preferred an appeal to the Incometax Appellate Tribunal	 which passed an order	 directing the Incometax Officer to scrutinize the expenditure	 and allowed the deduction to the extent that it did not result in the company becoming the owner of any asset. The High Court in deciding the reference held that the expenditure in question was revenue expenditure and was liable to be allowed 918 as deduction	 and answered the question referred in the affirmative and in favour of the assessee. Revenue appealed to this Court against the decision of the High Court. Dismissing the appeal	 the Court	 ^ HELD: Water supply lines were laid as a result of the expenditure incurred	 but these water pipelines were not the assets of the assessee but of the Shahabad Municipality and it was not as if the expenditure resulted in bringing into existence any capital asset for the company. The only advantage derived by the assessee by incurring the expenditure was that it obtained an absolution or immunity	 under normal conditions	 from the levy of certain municipal rates	 taxes and charges.[922E] As observed by this Court in Empire Jute Co. Ltd. vs Commissioner of Income tax	 [1980] 124 I.T.R. S.C. p. 1	 there may be cases where the 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. It is not every advantage of enduring nature acquired by an assessee that brings the case within the principles laid down in this test. What is material is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable on application of this test. If the advantage consists merely in facilitating the assessee 's trading operations or enabling the management and conduct of the assessee 's business to be carried on more effectively or more profitably while leaving the fixed capital untouched	 the expenditure would be on revenue account	 even though the advantage may endure for an indefinite future. [922H;923A C] In this case	 the advantage secured by the assessee by making the expenditure was the securing of absolution or immunity from liability to pay municipal rates and taxes under normal conditions for a period of fifteen years. If these liabilities had to be paid	 the payments would have been on revenue account and hence the advantage secured was in the field of revenue and not capital. As a result of the expenditure there was no addition to the capital assets of the assessee company and no change in its capital structure. The pipelines which came into existence as a result of the expenditure belonged to the Municipality. The expenditure was liable to be allowed as deductible from the profits under Section 10(2) (xv) of the Indian Income tax Act. [923F H;924A] 919 Atherton vs British Insulated and Helsby Cables Ltd.	 [1924] 10 Tax Cases 155	 192 and Empire Jute Co. Ltd. vs Commissioner of Income tax	 [1980] 124 I.T.R. S.C.p. 1	 referred to.