Suhas Chandra Sen, J. - (1.) The following question of law has been referred to this court by the Tribunal under Section 256(1) of the Income-tax Act, 1961 ("the Act"). "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure of Rs. 20,00,598 could not be allowed as a revenue expenditure as it represented an expenditure of capital nature?"
(2.) The assessment year involved in this reference is the assessment year 1972-73, for which the corresponding period of account is the year ending on December 31, 1971.
(3.) The facts found by the Tribunal as stated in the statement of case are as under : Before the Income-tax Officer, the assessee claimed deduction of Rs. 20,00,598 which had been incurred in the construction of a road by the assessee. The Income-tax Officer mentioned in his order that the road was 10 kms. long in the district of Kolhapur, Maharashtra. This road connected the main road with the company's mining area situated in a village named 'Nagarsatavdi'. The Income-tax Officer observed that there was no motorable road linking the main road with the mining area of the assessee-company and that this road was constructed by the assessee-company for the first time by incurring a huge expenditure. According to the Income tax Officer, this was a benefit of enduring nature coming to the assessee and he, therefore, treated it as capital expenditure and did not allow the deduction.;