Expenditure incurred by an assessee for acquiring additional power or facility for running machinery is revenue expenditure.

1. - This is an application under section 256(2) of the I.T. Act, 1961 (hereinafter referred to as " the Act "), praying that the Income- tax Appellate Tribunal, Jaipur Bench, Jaipur (for short " the Tribunal "), may be directed to submit a statement of the case and refer the following question of law arising out of the order of the Tribunal dated June 30, 1978, to this court for its opinion :

" Whether, on the facts and in the circumstances of the case, the ITAT was justified to hold that the sum of Rs. 18,501 pertaining to installation of poles and additional power lines by the R.S.E.B. was admissible as deduction in the computation of the assessee's total income for the assessment year 1974-75 ? "

2. The assessee is a registered partnership firm engaged in the manufacture of guwar gum and pulses used as cattle feed. In the accounting year relevant to the assessment year 1974-75, the assessee incurred an expenditure of Rs. 18,501 in the installation of poles and additional power lines. The assessee was having a 40 H.P. electric connection. On its request, the Rajasthan State Electricity Board sanctioned a load of 290 H.P. to the assessee, in order to cope with the heavy load required for manufacturing purposes. The Board decided to extend the 11 KV line up to the premises of the assessee. On account of the extension of 11 KV line, the assessee was required to pay the aforesaid sum of Rs. 18,501 to the Electricity Board. The installation remained the property of the Electricity Board. The assessee claimed deduction in respect of the expenditure incurred in the installation of poles and additional power line to the extent of Rs. 18,501 as revenue expenditure. The ITO refused to allow the deduction on the ground that the said expenditure was of capital nature. On appeal, the AAC, jodhpur, by his order dated April 12, 1977, held that the payment of the aforesaid amount of Rs. 18,501 by the assessee to the Electricity Board for installation of poles and laying of additional power line was in the nature of revenue expenditure, as it provided additional facility to the assessee and did not result in the creation of any new asset. On further appeal by the ITO, the Tribunal, by its order dated June 30, 1978, affirmed the order passed by the AAC and held that the expenditure was excludible as revenue expenditure because the same was incurred with a view that the existing set up of the assessee could function more efficiently.

3. The Commissioner submitted an application before the Tribunal for making a reference to this court, which was rejected by the Tribunal by its order dated December 28, 1978, on the ground that the finding recorded by the Tribunal, that the expenditure incurred by the assessee in getting the electric installation made it possible for the existing set up of the assessee to function more efficiently, was essentially a finding of fact and no question of law arose out of the order of the Tribunal.

4. In this application under section 256(2), it was urged by the learned counsel appearing for the Revenue, that the question which arose on the facts found proved by the Tribunal, namely, that the expenditure incurred by the assessee was of the nature of revenue expenditure or capital expenditure, was essentially a question of law and the Tribunal committed an error in not referring the aforesaid question to this court for its opinion.

5. There can be no doubt that whether on the facts found proved by the Tribunal, a specific expenditure could be considered to be revenue expenditure or it was of the nature of capital expenditure is a question of law and, ordinarily, the Tribunal should have referred such a question to this court on an application made before it under section 256(1). But, in cases, where the question of law raised is not substantial or the answer to the question is self-evident or the same has been concluded by a decision of the Supreme Court, the Tribunal is not bound to state the case nor is this cou