V.K. SINGHAL, J. - (1.) THE Tribunal has referred the following questions of law arising out of its order dt. 27th Jan., 1986 in respect of the asst. yr. 1980-81 under s. 256(1) of the IT Act, 1961. "1. Whether, on the facts and in the circumstances of the case the Tribunal was justified in holding that the development charges paid to RIICO is capital expenditure ? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in upholding the disallowance out of car expenses and depreciation on car?"
(2.) THE relevant facts for the purpose of disposal of this reference are that the assessee claimed deduction in respect of development charges paid to the RIICO. THE Tribunal found that the RIICO has levied two charges, one, of lease of land and the other for development incurred by it. THE development expenses have been incurred by RIICO so that the entire industrial belt is developed according to the standards fixed by the RIICO. THE RIICO in the alternative could have left the development to be made by the assessee himself. In that event the expenditure so incurred by the assessee would be definitely capital in nature though the land is a leasehold land. This matter was considered by this Court in the case of Manoj Dyeing Co. vs. CIT D.B. IT Ref. No. 6/87 decided on 14th Oct., 1992 [since reported at (1995) 125 CTR (Raj) 393] and it was held that : "....the nature of expenditure is in relation to a capital asset namely, the land which has been allotted by the RIICO to the petitioner. THE expenditure is in relation to a fixed capital asset and not to a circulating capital. THE fixed capital is that which the entrepreneur turns into profit by keeping the same in the business. THE character of the development charges, therefore, would be in respect of an asset of which enduring benefit has been availed by the assessee. THE development charges makes the land in a workable position so that entrepreneur can establish its unit and such expenditure is once for all. It cannot be considered to be an advantage of limited duration. THE nature of the advantage in the commercial sense is in the capital field." Following the said decision we are of the opinion that the Tribunal was justified in holding that the development charges paid to the RIICO is capital expenditure. The second question raised is purely a question of fact and in the statement of case no facts have been stated. The Tribunal has only observed in respect of both the questions that the questions of law do arise out of the order of the Tribunal. The statement of the case was accordingly drawn but neither any facts have been stated nor it could be considered that the question raised by the assessee is a question of law and, therefore, we refuse to answer the said question. It is the factual position which has to be determined by the Departmental authorities with regard to disallowance out of the car expenses and depreciation on car on account of personal use by the partner. No question can be said to have arisen out of the order of the Tribunal. Therefore, we refuse to answer the said question. Consequently, the question No. 1 is answered in favour of the Revenue and against the assessee and no answer is given in respect of question No. 2. No order as to costs.;