appeal by assessee and cross-objection by Revenue is for asst. yr. 1995-96. effective ground urged by assessee is directed against order of CIT(A) in directing AO that sum of Rs. 18 crores paid as per agreements dt. 10th Jan., 1995 and 11th Feb., 1995, is revenue expenditure, which should be allowed by spreading deduction equally over period of ten years, being period of tenure of agreements. According to assessee, CIT(A) should have allowed entire amount as deduction for assessment year under consideration. Further, assessee is objecting reliance placed by CIT(A) on decision of Hon ble Gujarat High Court in case of Anup Engg. Ltd. vs. CIT (1991) 98 CTR (Guj) 109: (1991) 192 ITR 633 (Guj) and decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. vs. CIT (1997) 139 CTR (SC) 555: (1997) 225 ITR 802 (SC). Coming to cross-objection by Revenue, it is directed against order of CIT(A) in allowing claim of assessee that payment made to Shri Amitabh Bachchan (Rs. 15 crores) and Smt. Jaya Bachchan (Rs. 3 crores) to tune of Rs. 18 crores, treating it as revenue expenditure. In this case, assessee filed return showing loss of Rs. 17,74,85,826 on 30th Nov., 1995. case was selected for scrutiny. Assessee was running business in name and style of "M/s Sopan Leasing (P) Ltd.". Subsequently, name was changed to "M/s Amitabh Bachchan Corporation Limited" ( ABCL for short). On 1st Oct., 1994, pursuant to amalgamation, another private limited company owned by Shri Bachchan in name of M/s Saraswati Audio Visual (P) Ltd. was amalgamated with ABCL. This was approved by jurisdictional High Court vide order dt. 31st Aug., 1995 on application No. 79 of 1995 filed by assessee. While framing assessment order, AO noticed, amount of Rs. 18 crores, being aggregate of amounts of Rs. 15 crores and Rs. 3 crores, was paid to Shri Amitabh Bachchan and Smt. Jaya Bachchan and amount was paid in terms of agreements entered with them and claimed as deductible, in view of company entering into entertainment business. Prior to amalgamation, company s main income was dividend and interest. board of directors in their meeting held on 1st Sept., 1994 decided to enter into new business, i.e., entertainment. AO did not allow claim of deduction under s. 37(1) and treated it as capital expenditure. CIT (Central) vide his letter dt. 29th Feb., 1996 also held same view. Assessee approached first appellate authority. CIT(A) decided issue in assessee s favour observing that no adjustment of brand equity can be made under s. 143(1)(a). Assessee was asked reason why brand equity payment to Shri Amitabh Bachchan and Smt. Jaya Bachchan should not be disallowed, treating it as capital expenditure. AO records, Authorised Representative appeared on 20th Jan., 1998 and submitted that they have no explanation to offer. Subsequently, assessee filed written submission, and opinion, of two advocates, Shri Y.P. Trivedi and Shri V.H. Patil. According to them, this is to be treated as revenue expenditure and claimed to be allowable under s. 37(1) of Act. AO rejected assessee s claim on basis of decision of Hon ble Supreme Court in case of Empire Jute Co. Ltd. vs. CIT (1980) 17 CTR (SC) 113: (1980) 124 ITR 1 (SC). He distinguished facts in instant case of assessee from case of Empire Jute Co. Ltd. (supra). He held, in that case expenditure was for purchasing longer working hours of loom, which was revenue expenditure; whereas in instant case of assessee, payment i s made for acquiring new asset, i.e., brand/copyright, that is to say, source of earning profit itself. He held, if stars, to whom payments made for their brands, worked for longer period, this would have been expenditure in nature of revenue; but here payment is made for longer period of ten years. It makes all difference. AO relied upon decision in case of Vallambrosa Rubber Co. Ltd. vs. Farmer 5 Tax Cases 529. While coming to above conclusion, he held, revenue expenditure is incurred every year whereas payments to both stars are for once and for all and it is therefore payment of enduring nature and also source itself. By making this payment assessee acquired brand. It is tool of assessee and new means of access for earning income. He held, new source of acquisition is payment access for earning income. He held, new source of acquisition is payment of capital nature. For above proposition, he relied upon decisions in case of V. Vicks Ltd. 3 KB 267; Sum Newspapers Ltd. and Associated Newspapers Ltd. vs. Federal Commission of Taxation (1938) 61 CLR 337; Tata Hydro-Electric Agencies Ltd. vs. CIT (1937) 5 ITR 202 (PC); Robert Iddi & Sons Collieries Ltd. vs. IRC, Tax Cases 671, C76 (CSS). AO further held, in instant case, source to earn income is brand of artist, by exploiting which assessee earned income, for which assessee paid Rs. 18 crores to actors, Shri Amitabh Bachchan and Smt. Jaya Bachchan. He relied on decisions in cases of Alianz & Co. Ltd. vs. Bell & B 666 KB; Pingle Industries Ltd. vs. CIT (1960) 40 ITR 67 (SC); R.B. Seth Moolchand Suganchand vs. CIT 1972 CTR (SC) 430: (1972) 86 ITR 647 (SC) and CIT vs. S.L.M. Maneklal Industries Ltd. (1977) 107 ITR 133 (Guj). He held, by acquisition of this brand, assessee facilitated or enabled management to conduct business efficiently and at same time leaves fixed capital untouched. Expenditure is thus of capital in nature. AO concluded, by this payment, new asset has been acquired, i.e., brand of star, which is tool for earning income. AO rejected assessee s claim that acquisition of brand is for ten years and therefore is not of enduring nature. To come to above conclusion, he relied upon decision of Hon ble Supreme Court in case of IR vs. Adam 1928 SC 738, wherein their Lordships held, even eight years expenditure is of enduring nature; as also decision of Hon ble Madras High Court in case of Chelpark Co. Ltd. vs. CIT (1991) 94 CTR (Mad) 71: (1991) 191 ITR 249 (Mad). AO also considered opinion of Shri V.H. Patil, wherein he held that five years would have been ideal. AO further held, enduring does not mean that everlasting in character. He got support from decision of Hon ble Supreme Court in case of CIT vs. Coal Shipments (P.) Ltd. 1972 CTR (SC) 151: (1971) 82 ITR 902 (SC). He held, none else can utilise brand. At most, assessee can only lease out brand for period of ten years. Reliance placed by assessee in case of Devidas Vithaldas & Co. vs. CIT 1972 CTR (SC) 28: (1972) 84 ITR 277 (SC) was also rejected. AO held, brand equity paid cannot be equated or compared with patent. Patent is protection to invention, which required registration under Patent Act. Patent has expiry date whereas brand does not have it. Assessee s reliance in case of Alembic Chemical Works Co. Ltd. vs. CIT (1989) 77 CTR (SC) 1: (1989) 177 ITR 377 (SC) was also rejected. AO held, acquisition of brand cannot be equated with technical know-how. He further held, acquisition of brand is not trading activity of assessee. Assessee is not purchasing and selling brands. As noted hereinabove, he held, brand is source of income and by exploiting same, assessee will earn profit. Reliance placed by assessee in case of CIT vs. Ashok Leyland Ltd. 1973 CTR (SC) 9: (1972) 86 ITR 549 (SC) was also rejected, distinguished facts and holding that that was payment made being compensation for termination of services of managing agent. contention of assessee that artists are not prevented totally in carrying on their profession as artists was also rejected by AO, holding that in fact, by virtue of cl. 7 of agreement, assessee has exclusive control over services of artists. Assessee s contention that assessee has not acquired any asset but only acquired right to use name of artist, i.e., brand, was also rejected. In light of decision of Hon ble Supreme Court in case of Mewar Sugar Mills Ltd. vs. CIT 1973 CTR (SC) 75: (1973) 87 ITR 400 (SC), AO held that payment made for monopoly rights is capital expenditure. In instant case, assessee has acquired monopoly right of brand for ten years. During this period no other person can utilise brand. He held, from business point of view also, it is capital expenditure. Assessee has not acquired anything relating to existing business of assessee but acquired new asset, which is tool/source of income. Reliance placed by assessee on decision of jurisdictional High Court in case of CIT vs. Cinceita (P) Ltd. (1982) 28 CTR (Bom) 250: (1982) 137 ITR 652 (Bom) was also distinguished on facts as in that case expenditure incurred was on stamp duty, registration charges and professional fees paid to solicitor who prepared and got registered lease deed; whereas it is not so in instant case of assessee. Here, it is payment for acquiring something new. decision of jurisdictional High Court again in case of CIT vs. Service Station Equipment (P) Ltd. (1981) 22 CTR (Bom) 72: (1981) 132 ITR 130 (Bom) was also distinguished. It was case wherein assessee entered into agreement with foreign company for manufacturing equipment, for which foreign party granted patent rights, technical information, etc. providing recurring royalty payment; whereas in instant case, he held, it is payment once for all. Reliance placed by assessee in case of Anup Engg. Ltd. vs. CIT (1991) 98 CTR (Guj) 109: (1991) 192 ITR 633 (Guj) was also negatived as assessee is not covered by Board circular, which was not so in that case. AO held, amount paid to Shri Amitabh Bachchan and Smt. Jaya Bachchan was for acquiring their capital assets, i.e., their brands. Earlier, assessee s main source was dividend and interest. Now, assessee entered into new field, i.e., entertainment business. Hence, he held, this is not expansion of existing business but new line of business. He further noted, for whatever reasons, as per item 4(i) of audit report in Form No, 3CD, auditors certified that there was no capital expenditure debited to P&L a/c. Only in computation of income expenditure of Rs. 18 crores is claimed as deductible. AO accordingly made disallowance observing as under: "On careful consideration, I find that claim is patently inadmissible in law since expenditure was incurred for acquiring tools of assessee s trade. As per balance sheet also, there is acquisition of asset. expenditure for acquisition of this asset was initial outlay for expansion of business of company by entering into new line, namely, entertainment. This expenditure was for acquiring enduring benefit. In view of above as well as case law cited by me while distinguishing case law cited by Natvarlal Vepari & Co. and Sri Y.P. Trivedi and Sri V.H. Patil, advocates, I am of firm opinion that expenditure incurred on acquisition of Brand equity is capital expenditure and accordingly same is not deductible under s. 37. Therefore Rs. 18 crores is disallowed." Aggrieved by above order, assessee approached first appellate authority. It was submitted before CIT(A) that if payment is made not for bringing into existence asset or advantage but for running business or working with view to produce profit, it is revenue expenditure. If asset or advantage for enduring benefit of business is thus acquired or brought into existence, it would be immaterial whether source of payment was capital or income of concern or whether payment was made once for all or was made periodically. source or manner of payment is of no consequence. It is only in those cases where this test is of no use that one may go to test of fixed or circulating capital and consider whether expenditure incurred was part of fixed capital of business or part of circulating capital, it would be in nature of revenue expenditure. tests are mutually exclusive and have to be applied to facts of each particular case. commercial expediency of businessman s decision to incur expenditure cannot be tested on touchstone of strict legal liability to incur such expenditure. decision has to be taken from point of view of businessman. Reliance was placed upon decision of Hon ble Karnataka High Court in case of CIT vs. Motor Industries Co. Ltd (1996) 136 CTR (Kar) 513: (1997) 223 ITR 112 (Kar). It was contended, if above test is considered, payment made to Shri Amitabh Bachchan and Smt. Jaya Bachchan is of revenue nature. Thereafter, CIT(A) discussed decision of Hon ble Supreme Court in case of Empire Jute Co. Ltd. vs. CIT (1980) 17 CTR (SC) 113: (1980) 124 ITR 1 (SC) relied upon by AO as well assessee. CIT(A) particularly stressed and taken note of decision of Hon ble Supreme Court, wherein it laid down that where particular expenditure even if it is expended for getting enduring benefit, even then it may fall in revenue account sometimes. What is material is to consider nature of advantage, whether it is in capital field or not. If it merely facilitates assessee s trading operations or enables management and conduct of business to be carried on more efficiently or more profitably, leaving fixed capital untouched, expenditure would be on revenue account, even if advantage is of enduring nature and available for indefinite future. Court further held, what is capital or revenue depends on what expenditure is calculated to effect from practical and business point of view rather than upon juristic classification of legal rights. decisions relied by AO in case of Tata Hydro-Electric Agencies Ltd. (supra) and in case of Pingle Industries Ltd. (supra), CIT(A) held, cannot be applied in instant case of assessee, particularly in view of subsequent decision of Hon ble Supreme Court in case of Empire Jute Co. Ltd. (supra), observing that these decisions and other decisions cited must be read and understood in context of later decisions of Hon ble Supreme Court, including Empire Jute Co. Ltd. s case (supra). He also distinguished decision relied upon by AO in case of Chelpark Co. Ltd. (supra), for reason that this was case where payment was made for restricting managing director from competing with business for five years. CIT(A) distinguished decision particularly for reason that in instant case of assessee, assessee is engaging artists for doing job work and it is not same duty of managing director. He also distinguished decision of Hon ble Supreme Court in case of Mewar Sugar Mills Ltd. (supra). Getting clue from decision of Hon ble Supreme Court in case of Coal Shipments (P) Ltd. (supra), wherein enduring benefit has been discussed, CIT(A) held that in instant case of assessee, artists have agreed to perform diverse acts for assessee whereby assessee can generate revenues from them and also copyrights on products. Thus, he held, it is user of brand equity that obtained by assessee and not any capital asset as such. He further held that expenditure incurred in acquiring goodwill of course is capital expenditure but payment made towards user of goodwill is of revenue nature and allowable as such. He particularly noted observation, "where, however, transaction is not one for acquisition of goodwill, but for right to use it; expenditure would be revenue expenditure" as observed by Hon ble Supreme Court in case of Devidas Vithaldas & Co. (supra). He also relied upon decision of Hon ble Supreme Court in case of Alembic Chemical Works Co. Ltd. vs. CIT (1989) 77 CTR (SC) 1: (1989) 177 ITR 377 (SC) and decision of Hon ble Gujarat High Court in case of Anup Engg. Ltd. vs. CIT (1991) 98 CTR (Guj) 109: (1991) 192 ITR 633 (Guj). He held, expenditure incurred by assessee definitely is not of capital nature but of revenue. However, CIT(A) further held that payment is made for right to use artists for ten years and hence he held, Rs. 18 crores is to be spread over every year equally. He particularly relied upon decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. vs. CIT (1997) 139 CTR (SC) 555: (1997) 225 ITR 802 (SC) and following observation of their Lordships: "......... However, facts may justify assessee who has incurred expenditure in particular year to spread and claim it over period of ensuing years. In fact, allowing entire expenditure in one year might give very distorted picture of profits of particular year. Issuing debentures is instance where, although assessee has incurred liability to pay discount in year of issue of debentures, payment is to secure benefit over number of years. There is continuing benefit to business of company over entire period. liability should, therefore, be spread over period of debentures." Aggrieved by above order, assessee is in appeal before Tribunal. Since main issue arises out of cross-objection, hence we take up cross-objection first. Shri Girish Dave, learned Departmental Representative on behalf of Revenue, submitted at outset, amount paid to both senior artists, i.e., Shri Amitabh Bachchan and Smt. Jaya Bachchan has been accepted in their hands as capital receipt. Hence, he submitted, amount should be treated on same line in hands of assessee, payer. learned Departmental Representative briefly submitted, company was incorporated as Sopan Leasing (P) Ltd. on 6th Jan., 1987. name was subsequently changed to Amitabh Bachchan Corporation (P) Ltd. on 29th Dec., 1994. It became public company on 28th Feb., 1995 and name again changed to Amitabh Bachchan Corporation Limited (ABCL). Pursuant to scheme of amalgamation sanction accorded by Hon ble Bombay High Court, business and undertaking of erstwhile Saraswati Audio Visuals (P) Ltd. (for short Saraswati ) got transferred to company from 1st Oct., 1984, being appointed date. learned Departmental Representative submitted, reasoning of learned CIT(A) given at p. 13, para 12, that Hon ble Supreme Court in case of Mewar Sugar Mills Ltd. (supra) has not discussed at all aspect of payment in respect of monopoly rights is incorrect. finding given in this para is contrary and self-defeating to his own finding given at paras 10 and 11. learned Departmental Representative further submitted, finding given at p. 14, para 13, particularly observation "the artists have agreed to perform diverse acts for appellant-company whereby appellant-company can generate revenues from them and also hold copyrights on products of such engagements. Thus, in my opinion, user of brand equity for 10 years cannot be hit by above observations" is self-defeating. learned Departmental Representative submitted, finding of AO that it is new business, has not been discussed by CIT(A) at all before-coming to above conclusion. He submitted, as far as assessee is concerned, it is new business. Earlier, assessee was receiving only dividend and interest, which was treated under income from other sources. Now, it is business income. learned Departmental Representative submitted, what was acquired by assessee, viz., ABCL is brand equity and before acquisition of brand equity, neither Shri Amitabh Bachchan nor Smt. Jaya Bachchan owned any brand. CIT(A) went wrong in coming to conclusion that prior to "user" by ABCL, some other persons were holding brand now given to ABCL. This finding of CIT(A) is contradictory and self-defeating, submitted learned Departmental Representative. He further assailed finding of CIT(A) with reference to judgment of Hon ble Supreme Court in case of Coal Shipments (P) Ltd. (supra), and submitted that CIT(A) in fact confounded and confused acquisition of brand equity with user of brand equity. He submitted, very purpose of agreement was acquisition of brand equity and not its user. Neither Shri Amitabh Bachchan nor Smt. Jaya Bachchan was in business of selling brands nor was ABCL in business of acquiring brands. He invited our attention to decision of Hon ble Supreme Court in case of Shriram Chits (1993) (SU4) SCC 226A for proposition that deferred revenue expenditure by definition is intangible asset. He submitted, expenditure in question must be regarded as capital expenditure as object of expenditure was to acquire new brand and to start new business. learned Departmental Representative invited our attention to several clauses of agreement defining terms "engagement", "engagement schedule", "guaranteed payment", "guaranteed period", "pre-engagement period" and "post-engagement period". relevant clauses read as under: " Engagements means acts, deeds and performances of artist by himself and/or jointly with others within India and throughout world, during engagements schedule, save and except those accruing to artist by virtue of cl. 1.7, which corporation alone may exploit commercially to generate revenue and includes artist s performances as: (i) actor/performer in cinematograph films, feature films and television films and other audio-visual works howsoever described (ii) singer or voice recording artist (iii) dancer (iv) commentator or compere of live or recorded shows that may be performed or broadcast, telecast terrestrially or otherwise howsoever (v) live stage performer (vi) model for still and video photography (vii) part of any programme organised by corporation for benefit of tourists and fans or fan clubs of artist and/or their members (viii) responding to telephone calls during promotion programmes arranged by corporation such as premium ratelines (ix) endorser of any brand of any product or service, permitting use of artist s trademark, ideogram, logogram, monogram and name as user, promoter of such brand or service, or otherwise howsoever save and except brands, products or engagements which artist in his reasonable opinion finds derogatory, offensive, unethical or otherwise objectionable (x) facilitating autography on photographs, articles, writings, voice recording for use in telephone answering machines and generally for merchandising products and engagements (xi) facilitating and promoting, at reasonable discretion of corporation all or any article, service, product not offensive to public morality or decency whether or not merchandised by corporation which, in opinion of corporation will generate revenue for corporation save and except any such article, service or product which artist may reasonably consider objectionable (xii) attending interviews, talk shows arranged or produced by corporation (xiii) promoter of art forms, cultures, tourism and travel to such destinations and in such manner as corporation may require artist to do (xiv) attending public functions including fashion shows, sales of articles and things merchandised by corporation, sports events, cultural events, etc. (xv) promoting at instance of corporation other artists by oral or written means (xvi) part of commercial advertisements which may be exploited in any media (xvii) attending press conferences arranged by corporation and other non-commercial appearances which may include radio and television broadcasts. Engagement schedule means schedule during which artist will fulfil his obligations under these presents, which schedule shall contain dates, times and locations for publicity and includes recording shooting, pre-production period and post-production periods. Guaranteed payment means non-refundable sum of rupees fifteen crores only, which corporation shall pay to artist as entire consideration for assignment contemplated in cl. 3 below. Guaranteed period means period of 120 working days exclusive of bank and public holidays in any given calendar year during which artist shall be available for engagements. Pre-engagement period shall mean such period as corporation may allocate in engagements schedule for purposes of preparing to fulfil his obligations under agreement such as auditions, tests, rehearsals. Post-engagement period shall mean such period as corporation may allocate in engagements schedule for purposes of completion of activity arising out of engagements of artist." learned Departmental Representative further brought our attention to cls. 1.2 and 1.7 of agreement at pp. 160 and 161 of paper book, which read as under: "1.2 This agreement is executed subject to approval by RBI under provisions of Foreign Exchange Regulation Act, 1973 and all payments due to artist hereunder shall become due and payable only after receipt of such approval. Any reference in agreement to any statute or statutory provision shall be construed as including reference to that statute or statutory provision as from time to time amended, modified and extended or re-enacted whether before or after date of this agreement and to all statutory instruments, orders and regulations for time being made pursuant to it or deriving validity from it. All rights hereby granted to corporation are granted solely and exclusively to corporation. It is expressly understood that nothing contained in this agreement shall restrict right of artist to pursue his professional career as actor, whether in principal role or otherwise, in feature films that artist may in his personal capacity sign up or enter into contract to act in feature film, with any third party/person having no interest whatsoever in corporation or its activities. Provided that artist shall not sign for any role in any feature film in cases where corporation has obtained from artist prior commitment in relation to feature film similar to one contemplated above. And provided further that artist shall accord priority to complete feature films contemplated in cl. 2.1.2 below." learned Departmental Representative further brought our attention to cl. 1.9, which deals with royalty payable after expiry of contract period to artist or to his nominee. He further brought our attention to cl. 6.7 of agreement, wherein artist is restrained during validity of agreement with assessee to participate in any activity, which assessee considers against its commercial interest. Inviting our attention to order of Tribunal in case of Amitabh Bachchan and Mrs. Jaya Bachchan (ITA Nos. 4453 and 4504/Mum/2000 and C.O. No. 111/Mum/2001, dt. 5th Nov., 2002), particularly paras 64, 75, 76, 80, 81, 83, 85 and 87, learned Departmental Representative submitted, it was always stand of recipients, i.e., artists, what they received was capital receipt. He submitted, it was case therein that assignment was granted irrevocably and unconditionally as they waive all rights in engagements and any such rights they are entitled to either now or in future is restricted. It was also case therein that right to manage one s profession and to exercise same, which have been assigned to ABCL (assessee herein) by virtue of agreement, cannot be treated as revenue receipts. learned Departmental Representative submitted, inviting our attention t o paper book p. 4, wherein in item No. 7, it is mentioned that assessee company is entering into new business, i.e., entertainment field. It is further mentioned, "Earlier company s main income was dividend and interest. board of directors in meeting held on 1st Sept., 1994 decided to enter into entertainment business". Hence, this is new business line and payment is made for acquiring source as such and this cannot be treated as expansion of existing business and it is new business itself. learned Departmental Representative brought our attention to items (iii) and (iv) at p. 15 of paper book, i.e., 8th Annual Report for 1994-95 of assessee company, which read as under: "(iii) Pursuant to agreement entered into by and between Smt. Jaya Bachchan and your company, company is entitled to exploit her name as brand name for diverse purposes, set out in agreement. In lieu thereof, Smt. Jaya Bachchan has been paid Rs. 3 crores. Smt. Bachchan would, as per arrangement, also be entitled to share 1 per cent of profit before tax earned by your company before taxation. (iv) In same fashion, agreement has been entered into by and between Shri Amitabh Bachchan and your company, whereas company is entitled to exploit his name as brand name for various purposes as are mentioned specifically in agreement. For this purpose, Shri Amitabh Bachchan would be entitled to receive Rs. 15 crores and share in profit before tax to tune of 4 per cent." learned Departmental Representative submitted that in Sch. 13 1(h), item No. (iii), assessee has treated expenditure as deferred revenue payment. Relying upon decision of Hon ble Supreme Court in case of Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34 (SC), learned Departmental Representative submitted, it is laid down in this decision that purpose, aim and object are to be seen before coming to conclusion. Inviting our attention to several clauses of agreement defining term "engagement", learned Departmental Representative submitted, assessee is acquiring for first time brand equity. It is new source of income. He brought our attention to decision of Hon ble Supreme Court in case of CIT vs. Jalan Trading Co. (P) Ltd. (1985) 47 CTR (SC) 182: (1985) 155 ITR 536 (SC), particularly p. 541 and submitted, source and manner of payment are irrelevant in deciding true nature of payment. He also relied upon decision of Hon ble Madras High Court in case of India Manufacturers (P) Ltd. vs. CIT (1984) 38 CTR (Mad) 68: (1985) 155 ITR 770 (Mad) for proposition that consideration paid for acquisition of rights of distribution of products for five years must be considered as capital expenditure. Relying upon decision of Hon ble Madras High Court in case of Chelpark Co. Ltd. (supra), learned Departmental Representative submitted, any payment made to prevent from carrying on of any competitive business for five years was capital in nature and not allowable as deduction. Learned Departmental Representative submitted, relying upon decision of Hon ble Andhra Pradesh High Court in case of CIT vs. Southern India Mining & Slab Co. (1987) 63 CTR (AP) 175: (1988) 171 ITR 193 (AP), expenditure incurred under lease agreement to acquire source to draw raw materials for conducting business was held to be capital in nature. learned Departmental Representative also relied upon decision of jurisdictional High Court in case of Kirloskar Oil Engines Ltd. vs. CIT (1993) 115 CTR (Bom) 268: (1994) 206 ITR 13 (Bom) for proposition that where there is acquisition of drawings, designs and manufacturing rights, payment made must be regarded as capital in nature. He further relied upon decision of Hon ble Gujarat High Court in case of Anup Engg. Ltd. (supra) for proposition that acquisition of exclusive rights for use of patents for manufacturing of goods must be treated as consolidated revenue expenditure and spread over period of sixteen years. learned Departmental Representative further relied upon decision of Hon ble Calcutta High Court in case of Indian Explosives Ltd. vs. CIT (1983) 35 CTR (Cal) 244: (1984) 147 ITR 392 (Cal), wherein expenditure for constructing building on land taken on licence for period of ten years with option for renewal for another ten years, was held to be incurred for acquisition of asset which was source of profit, as such capital expenditure. learned Departmental Representative also relied upon following decisions for proposition that expenditure incurred in respect of benefit of enduring nature must be regarded as capital expenditure: (1) CIT vs. Hindustan Pilkington Glass Works (1983) 139 ITR 58 (Cal) (2) Grover Soap (P) Ltd. vs. CIT (1997) 137 CTR (MP) 546: (1996) 221 ITR 299 (MP) (3) Hawlett Packard India Ltd. vs. Dy. CIT (2003) 80 TTJ (Del) 208: (2003) 85 ITD 455 (Del) (4) Shaw Wallace & Co. Ltd. vs. Asstt. CIT (2003) 86 ITD 315 (Kol) (5) Ramakrishna & Co. vs. CIT (1973) 88 ITR 406 (Mad) Hence learned Departmental Representative submitted, order of learned CIT(A) is liable to be set aside. In reply to above, Shri A.V. Sonde, learned counsel for assessee, submitted, essential features of agreement ought to be considered. Learned counsel submitted, assessee entered into two separate agreements dt. 10th Jan., 1995 with Shri Amitabh Bachchan and Smt. Jaya Bachchan for procuring their services and right to use their brand equity for agreed period, to enhance business prospects of assessee. Certain terms of aforesaid agreements were modified by supplementary agreement dt. 11th Feb., 1995 (placed at pp. 152 to 185 and pp. 186 to 215 of paper book). Learned counsel submitted, cl. 2 defines "contractual engagement"; cl. 3 defines "assignment" and cl. 4 defines "payment", which read as under "2. Contractual engagement Subject to payment of consideration as hereinafter set out: 1. artist agrees to perform engagements and fulfil all commitments related thereto during guaranteed period exclusively for corporation and upon receiving reasonable notice shall make himself available during pre- engagement and post-engagement periods also. 2. artist shall during each and every financial year act/perform in one feature film which corporation may in its absolute discretion produce or co- produce. Commencement of shooting during financial year shall be sufficient compliance of corporation s obligation herein contained. corporation and artist shall not at any time during validity of this agreement do any act which might bring corporation and/or artist or product of engagements into public disrepute or offend any community or public morals or prejudice corporation or artist or exploitation of engagements. corporation shall not require artist to render engagements of dangerous or hazardous nature or to undertake work which involves unreasonable degree of risk." "3. Assignment corporation shall pay to artist sum of rupees fifteen crores as follows, being consideration for assignment contemplated herein: (a) Rupees twelve crores within 7 (seven) working days of receipt of approval of RBI per cl. 1.2 above. (b) Rupees three crores within 45 days of receiving approval of RBI per cl. 1.2 above. Subject to receipt of aforesaid sum of rupees fifteen crores, artist hereby assigns to corporation entire copyright, whether vested, contingent or future and all other rights of whatever nature in and to engagements and products of engagements and in any work in which copyright subsists or may come into existence, whether now known or in future created to which artist is now or may at any time after date of this agreement and during ten year duration of this agreement be entitled to by virtue of or pursuant to any of laws in force in any part of world. assignment is absolute in respect of aforesaid rights. artist is now and will be entitled to during ten year duration of this agreement and for whole period of such rights for time being capable of being assigned together with all renewals, reversions and extensions throughout world. In consideration of guaranteed payment as above; -1 artist irrevocably and unconditionally grants and confirms to corporation all consents required and contemplated by law relating to copyright, designs, patents and trademarks and all other laws now or in future in force in any part of world which may be required in respect of engagement for exploitation by corporation of engagements and product of engagements whether or not by means now known or developed in future for full duration of rights acquired by corporation pursuant to this agreement and pursuant to laws in force in any part of world. 2. artist irrevocably and unconditionally waives all rights in engagements to which artist is now or may in future be entitled pursuant to provisions of law relating to copyright, designs, patents and trademarks and any other rights to which artist may be entitled under any legislation now existing or in future enacted in any part of world and surrenders such right to corporation. 3. corporation shall subject to maintaining dignity of artist, have right to use names, sobriquet, autograph, likeness, photograph, trademarks, ideogram, logogram, monogram and all other products of engagements or any part of it in connection with any merchandising and/or publishing or music publishing endeavours provided that artist shall not be depicted as endorsing any commercial product publicized independently of engagements where such product is not featured. 4. artist warrants and confirms that corporation shall with consent of artist, which shall not be unreasonably withheld, have right to make and/or authorise or commission others to make any documentary film on engagements and products of engagements related to film and acknowledges that such documentary film may include footage of so-called "behind-the-scenes" activities featuring persons including artist. corporation may feature artist in such documentary film and/or any other audio visual production and artist confirms that corporation shall have right to exploit any or all of foregoing in any and all media by any and all manner or means for full period of copyright including all renewals, reversions and extensions and after that so far as permissible in perpetuity throughout world. 5. artist warrants and confirms that corporation shall have right to reproduce and authorise others to reproduce voice of artist and product of engagements from soundtracks of film if any on to commercial phonograph, compact disc, magnetic tape and/or other recording media and to sell distribute sub-license and otherwise exploit such recording in any and all media by any and all manner or means for full period of copyright including all renewals, reversions and extensions and after that so far as permissible in perpetuity throughout world. 6. corporation shall have right to dub artist s voice in English and/or any foreign language to such extent as may be desired by corporation but at cost and expense of corporation." "4. Payment In addition to guaranteed payment and subject to full, complete and timely performance and observance by artist of all his obligations under this agreement, corporation shall pay to artist in each year sum not exceeding 7.5 (seven and half) per cent of profit earned by corporation before taxation. In addition to what is provided for in cl. 4.1 above, in event of corporation producing or co-producing feature film in each year as contemplated in cl. 2.1-2, corporation shall pay to artist sum not exceeding rupees three crores. All sums payable pursuant to this agreement, shall as artist irrevocably directs be payable in favour of Amitabh Bachchan and artist s receipt shall be full and sufficient discharge to corporation of corporation s liability to make such payments. consideration payable to artist under this agreement is and represents full and final consideration for rights hereby assigned, engagements and all products of engagements and shall include any and all residual, repeat, re-run, foreign use and exploitation. No further or additional payment shall be due from corporation. artist expressly authorises corporation to deduct and withhold from all sums due to artist under this agreement any sums which may be deductible in accordance with local laws or regulations from time to time on deductible in accordance with local laws or regulations from time to time on account of taxes or otherwise." Learned counsel submitted, conjoint reading of cls. 2, 3 and 4 along with definitions of "guaranteed payment", "guaranteed period" and "engagement period" would suggest that sum of Rs. 15 crores has been paid for assignment by assessee to Shri Amitabh Bachchan for (a) entire copyright, whether vested, contingent or future; and (b) all other rights of whatever nature in and to engagements and any work in which copyright subsists or may come into existence, whether now known or in future created at any time during ten years duration of agreement to which artist would have been entitled to. Learned counsel further submitted, contrary to submission of Revenue that right is available for ten years, in effect assignment was absolute in respect of aforesaid rights. Assessee would be entitled to all rights, which may come into existence during ten years agreement period. In other words, whatever comes into existence on account of performance/engagements and products of engagements would absolutely belong to assessee and not to artist. engagements are seventeen in number, as evident from definition of term "engagements" mentioned hereinabove. Learned counsel submitted, in fact, instead of making periodic payments for each one of activities specified in engagements, assessee made consolidated payment of Rs. 15 crores to Shri Amitabh Bachchan and obtained services of artist for enumerated seventeen engagements for period of 120 days for each year, for next ten years from signing of agreement. By virtue of this payment, assessee is not supposed to make any further payment whatsoever to artist. If assessee engages either of artists for performing any of acts specified in engagements, assessee has to make payment to performing artist for each and every single engagement specified above throughout ten years period of agreement. If assessee makes payment whatsoever from time to time for each and every engagement to artist engaged by this agreement or to any other artist, such payment necessarily has to be considered as revenue expenditure, no doubt of it. Now, question is, when assessee made consolidated payment for engagements of artists and obtained their services for 120 days for each year for next ten years, whether such consolidated payment becomes capital or revenue. consolidated payment draws its colour, nature and characteristic from recurring payment, which assessee got rid of by this consolidated payment. Learned counsel submitted, principle first came up for consideration in case of BW Noble Ltd. vs. Mitchell (1927) 11 TC 372 (CA). principle was applied by Hon ble Supreme Court in case of CIT vs. Ashok Leyland Ltd. 1973 CTR (SC) 9: (1972) 86 ITR 549 (SC) for first time. In this case, continuance of managing agency became superfluous owing to change in certain circumstances. assessee, to get rid of its liability to pay office allowance as well commission to managing agency, lump sum payment was made to avoid recurring expenditure. question was whether this is benefit acquired in nature of enduring benefit or not. Hon ble Supreme Court held "that compensation paid for termination of services of managing agents was payment made with view to save business expenditure in accounting period as well as few subsequent years; it was not made for acquiring any enduring benefit or income-yielding asset. By avoiding certain business expenditure company could not be said to have acquired enduring benefits or any income-yielding assets. expenditure was of revenue nature and was allowable deduction in computing profits of assessee company". Learned counsel brought our attention particularly to following observation of Hon ble Supreme Court at p. 554, which reads as under: "To quote illustration given by Rowlatt, J. in B.W. Noble Ltd. vs. Mitchell (1927) 11 Tax Cases 372 (CA), in ordinary case payment to get rid of servant when it is not expedient to keep him in interests of trade would be deductible expenditure. payment made to remove possibility of recurring disadvantage cannot be considered as payment made to acquire enduring advantage." Getting clue from above, learned counsel submitted, payment made with view to saving business expenditure, which otherwise likely to incur year after year, but by making consolidated payment which could get rid of, is not payment made for acquisition of any enduring benefit. Again, this principle, learned counsel submitted, was applied by Hon ble Bombay High Court in t h e case of CIT vs. Associated Cement Companies Ltd. (1974) 96 ITR 650 (Bom). In this case assessee s factory was located outside municipal limits of Shahabad and Government decided to include area of factory within municipal limits and on negotiation compromise was reached between assessee and municipality. It was agreed that assessee would spend Rs. 2 lakhs and odd on installing pipelines, which should become property of municipal committee and in turn municipal committee would exempt assessee from municipal taxes for period of fifteen years. Assessee claimed this was revenue expenditure and Hon ble High Court agreed with assessee. Ultimately, Hon ble Bombay High Court, approving view taken by His Lordship Rowlatt, J. in B.W. Noble Ltd. s case (supra), held "a payment made to remove possibility of recurring disadvantage cannot be considered as payment made to acquire enduring advantage". His Lordship further observed as under: "According to Mr. Joshi, conclusions in above case should be restricted to facts which had come up for consideration and that principle enunciated in B.W. Noble s case and in CIT vs. Ashok Leyland Ltd. should be restricted to payment made to employees, agents, directors or managing agents. In my view principle enunciated is much wider and it appears to have been held that payment made or expenditure incurred to remove possibility of recurring disadvantage (as is case before us) cannot be considered as payment made to acquire enduring advantage in sense that it would be within test laid down by Viscount Cave LC in Atherton s case." When matter was carried before Hon ble Supreme Court in case of CIT vs. Associated Cement Companies Ltd. (1988) 70 CTR (SC) 28: (1988) 172 ITR 257 (SC), Their Lordships observed as under: "If this principle is applied to facts of case before us, what we find is that advantage which was secured by assessee by making expenditure in question was securing of absolution or immunity from liability to pay municipal rates and taxes under normal conditions for period of fifteen years. If these liabilities had to be paid, payments would have been on revenue account and hence advantage secured was in field of revenue and not capital." Again, inviting our attention to decision of Hon ble Bombay High Court in case of Champion Engg. Works Ltd. vs. CIT (1971) 81 ITR 273 (Bom), learned counsel submitted, issue has to go in assessee s favour. In case of Champion Engg. Works Ltd. (supra), wherein one Mr. P.V. Shah, appointed as chief executive, was paid monthly salary allowances, he was allowed to do private practice, consultation, survey, etc. When renewal stage came after three years of first appointment period, assessee thought it prudent to pay lump sum amount instead of making monthly payment to Mr. Shah so as to induce him to give up his private practice as consulting engineer. Assessee claimed this as revenue expenditure. When matter reached before Hon ble Bombay High Court, Their Lordships applied principles laid down in case of Atherton vs. British Insulated & Helsby Cables Ltd. (1925) 10 TC 155 (HL) and held as under: "The phrase enduring , as contained in speech of Viscount Cave LC, has been explained in subsequent decisions in following manner: (1) advantage paid for need not be of positive character and may consist in getting rid of item of fixed capital that is of onerous character. (2) By enduring is meant enduring in way that fixed capital endures and it does not connote benefit that endures in sense that for good number of years it relieves assessee of revenue payment. payment which frees assessee from liability to make annual revenue payment is revenue expenditure. Thus, sum paid by assessee to free himself from disadvantageous agency agreement, or sum paid to employee in commutation of annual pension, is revenue expenditure, because it frees assessee from liability to make annual revenue payment ." Learned counsel submitted, case of assessee falls within second proposition inasmuch as lump sum amount paid saved company from liability to make annual revenue payment; as such it was of revenue nature. Learned counsel further brought our attention to decision of Hon ble Madras High Court in case of CIT vs. Madras Auto Service Ltd. (1983) 33 CTR (Mad) 106: (1985) 156 ITR 740 (Mad). In this case, learned counsel submitted, assessee company taken on lease land and building in Bangalore for housing its branch and assessee entered into agreement with landlord whereby assessee agreed to demolish building and construct new one. expenditure incurred for demolishing existing structure and construction of new building was claimed by assessee as revenue expenditure. This claim was rejected by Revenue authorities on ground that expenditure was incurred to obtain lease and therefore, capital in nature. Tribunal, instead of looking expenditure from this angle, noted that what assessee saved was recurring expenditure. When matter reached before Hon ble High Court, view taken by Tribunal was upheld following principles laid down by Hon ble Supreme Court in case of Ashok Leyland Ltd. (supra), which reads as under: "The ruling of Courts on this point is but extension of principle that whatever substitutes or surrogates revenue expenditure is also revenue expenditure. surrogated expenditure may be lump sum payment. It may be laid out at any stage. But,s if it saves taxpayer from incurring in very year or in other years other revenue payments either in whole or in part, then expenditure has to qualify as revenue expenditure." In view of above, learned counsel submitted, lump sum payment made by assessee, for engagement of artists for 120 days in each year, over period of ten years, is nothing but lump sum payment for avoidance of recurring payment. Had assessee paid artists for each engagement, this would have been treated by Revenue as revenue expenditure. point before Bench, learned counsel submitted, is as to whether it can be considered as capital expenditure only for reason that assessee, by virtue of agreement, has got exclusive access to artists for next ten years? exclusive availability of artists to assessee under contract is relevant in determining character of receipt in hands of artists. This is particularly so because by this agreement artists bind themselves to assessee, thus rendering themselves sterile from entering into contract with other entities for 120 days or enjoying any rights which they would have been entitled to, had they not been bound hand and foot to assessee. Assessee, t same time, is at liberty to enter into one or more contracts in respect of one or more engagements with other artists, for any or all period and anywhere in world. binding nature of contract with artists has no relevance, looking at agreement through eyes of assessee. On other hand, exclusivity of commitments undertaken by artists may result in payments to artists, as capital, perhaps in his/her hands. Learned counsel submitted, it is precisely for this reason, Tribunal has held in case of artists that payments received by them are capital receipts. Learned counsel submitted, decision of Hon ble Madras High Court in case of Madras Auto Services Ltd. (supra) travelled upto Hon ble Supreme Court and Their Lordships approved view taken by High Court in CIT vs. Madras Auto Service (P) Ltd. (1998) 148 CTR (SC) 398: (1998) 233 ITR 468 (SC). Learned counsel further submitted, it is not universally true proposition that capital receipts in hands of payee must necessarily be capital expenditure in hands of payer as well. nature of receipt is not determinative of nature of payment. For above proposition, learned counsel relied upon following observation of Hon ble Supreme Court in case of Empire Jute Co. Ltd. (supra): "It is not universally true proposition that what may be capital receipt in hands of payee must necessarily be capital expenditure in relation to payer. fact that certain payment constitutes income or capital receipt in hands of recipient is not material in determining whether payment is revenue or capital disbursement qua payer." same principle, learned counsel submitted, has been taken by Hon ble Supreme Court in case of CIT vs. Ciba of India Ltd. (1968) 69 ITR 692 (SC) and Hon ble Andhra Pradesh High Court in case of CIT vs. Warner Hindusthan Ltd. (1985) 48 CTR (AP) 231: (1986) 160 ITR 217 (AP). Learned counsel submitted, in hands of Shri Amitabh Bachchan, agreement entered into with assessee is restrictive, and hence, in his hands receipt is capital in nature. But, in case of assessee, agreement with Shri Amitabh Bachchan is not restrictive one as assessee can approach many others with same proposal. Learned counsel further submitted, in considering whether item of expenditure is of capital or revenue in nature, one must consider nature of concern, ordinary course of business usually adopted in that concern and object with which expenses are incurred. For above proposition, he relied upon decision of Hon ble Supreme Court in case of Assam Bengal Cement Co. Ltd. vs. CIT (1955) 27 ITR 34, 45 (SC). Learned counsel further urged, emphasis must be placed upon business aspect of transaction rather than purely legal and technical aspects. For this proposition, he relied upon decision of Hon ble Bombay High Court in case of CIT vs. Kolhia Hirdagarh Co. Ltd. (1949) 17 ITR 545, 555 (Bom). He also referred to decision in case of Mohanlal Hargovind of Jubbulpore vs. CIT (1949) 17 ITR 473, 477 (PC), wherein it was held "what is outgoing of capital and what i s outgoing on account of revenue depends on what expenditure is calculated to effect from practical and business point of view rather than upon t h e juristic classification of legal rights, if any, secured, employed or exhausted in process". Learned counsel further submitted, expression "capital expenditure" is not defined and words "in nature of capital expenditure" which occur in this section make meaning of expression more elastic in its application to facts of each case. expression must be construed in business sense except insofar as there may be rules of construction applicable to it. Learned counsel further brought our attention to decision in case of Atherton vs. British Insulated & Helsby Cables Ltd. (1925) 10 Tax Cases 155: 1926 AC 205 (HL), authority on subject. In this case, assessee company claimed to deduct sum, which it settled upon trust to form nucleus of pension fund for its employees. claim was rejected on ground that expenditure was of capital sum, which would forever relieve ground that expenditure was of capital sum, which would forever relieve company from making any further payment whatsoever. Viscount Cave pointed out in this case that dictum of Lord Dunedin in Vallambrosa Rubber Co. Ltd. vs. Farmer 5 Tax Cases 529 that "capital expenditure is thing which is going to be spent once and for all and income expenditure is thing which is going to recur every year" is not, and was not intended to be, decisive test in every case. There are many cases where payment though made "once and for all" would be properly chargeable against revenue receipts for year. Further, learned counsel brought our attention to decision in case of Anglo-Persian Oil Co. Ltd. vs. Dale 16 Tax Cases 253, 274, wherein Romer LJ laid down that by "enduring" is meant "enduring in way that fixed capital endures" and it does not connote benefit that endures in sense that for good number of years it relieves assessee of revenue payment or disadvantage. Learned counsel further brought our attention to decision of Hon ble Supreme Court in case of Assam Bengal Cement Co. Ltd. (supra), wherein Justice Bhagwati elucidated that expression "once and for all" in Viscount Cave s test does not mean that payment should be made in single sum and at one time, that is to say, "the expression once and for all is used to denote expenditure which is made once and for all for procuring enduring benefit to business as distinguished from recurring expenditure in nature of operational expenses". Learned counsel also relied upon decision of Hon ble Supreme Court in case of Alembic Chemical Works Co. Ltd. (supra), wherein Hon ble Supreme Court held that "once for all" payment test is not conclusive test for determining whether expenditure constitutes capital expenditure or not. Thus, learned counsel submitted, lump sum payment to artists is not decisive determining factor that determines nature of expenditure. Learned counsel further relied upon decision of Tribunal in case of ITO vs. Gemini Pictures Circuit (P) Ltd. (1990) 37 TTJ (Mad) 270: (1990) 34 ITD 94 (Mad). In this cases Tribunal held that lump sum amount paid by assessee as future rents upto lease period in order to get lessor to waive its right of re-entry on ground of non-payment of rent is allowable expenditure. Learned counsel particularly brought our attention to para 13 of Tribunal s decision mentioned above, wherein Tribunal referred to decision in case of Gemini Arts (P) Ltd. (ITA Nos. 332 and 690/Mad/1986, dt. 26th Aug., 1997), which reads as under: "12. There is also justification for this in provisions of Act itself. expenditure in question is allowable as expenditure laid out or expended wholly and exclusively for purpose of business under s. 37. That section does not limit expenditure to that incurred for purpose of earning income of year. As long as it is laid out for purpose of business fact that assessee may derive some benefit from that expenditure for period of more than year does not detract from eligibility of deduction under that section. Under original lease deed rent was payable annually and, therefore, only rent which accrued and was payable for that year could be allowed as deduction. When that contract to pay annual rent was substituted by contract to pay lump sum, original contract to pay annual rent was discharged in terms of s. 67 of Indian Contract Act. What survives and is in force is only substituted contract under which lump sum becomes payable and accrues expenditure in previous year relevant to this assessment year itself. While nature of payment remains same because it was substitution or surrogate of earlier revenue expenditure, point of accrual of expenditure has undergone change due to novation and hence entire amount becomes deductible under s. 37 of IT Act, 1961. Therefore, we are unable to accept alternative submission of Revenue. In circumstances, we find that expenditure of Rs. 1,80,000 was admissible deduction under s. 37 and we direct ITO to allow same in computing total income." Learned counsel submitted, it is settled proposition that where payment is made for right to use asset (premises, goodwill, brand, etc.) and not for acquisition of asset itself, it is revenue expenditure. Assailing contention of learned Departmental Representative that what assessee acquired is brand equity and not right to use, learned counsel submitted, it is not borne out of record. amount paid to Shri Amitabh Bachchan and Smt. Jaya Bachchan under agreements dt. 10th Jan., 1995, as modified by supplementary agreements dt. 11th Feb., 1995, is for acquisition of right to use brand equity of their names, for diverse purposes and right to contract with third parties in relation to engagements meaning acts, deeds and performances of these artists within India as also throughout world. contract is for period of ten years with 120 working days every year, as per cl. 1.1 of agreement. As per cl. 1.7 of agreement, artists were otherwise free to pursue their professional career. Thus, learned counsel submitted, payments were not for brand equity but for partial user thereof. Learned counsel relied upon decisions of Hon ble Supreme Court in cases of Devidas Vithaldas & Co. (supra) and Alembic Chemical Works Co. Ltd. (supra). Learned counsel submitted, in case of Alembic Chemical Works Co. Ltd. (supra), assessee, manufacturer of penicillin, made once for all payments to Japanese enterprise to get most suitable penicillin producing strains in pilot plant, technical information, know-how and written description thereof. stand of Revenue, Tribunal and High Court was reversed by Hon ble Supreme Court and Their Lordships held that payment was for only supply of most suitable sub-cultures for augmentation of yield of penicillin and business of assessee before and after this payment was manufacture of penicillin. It was merely improving or updating fermentation process, which was already being manufactured by assessee. limitation placed on assessee under agreement regarding non-partibility, confidentiality, etc. is more in nature of use of know-how than its exclusive possession. ideas of once for all payment and enduring benefit are not to be treated as something akin to statutory conditions, nor notions of capital or revenue judicial fetish. What is capital expenditure and what is revenue are not eternal verities but needs flexibility so as to respond to changing economic scenario. expression "asset or advantage of enduring nature" was evolved to emphasise element of sufficient degree of durability appropriate to context. There is no single definitive criterion to determine what is revenue or capital outlay. once for all test is inconclusive. What is relevant is "purpose of outlay and its intended object and effect", considered in commonsense way having regard to business realities. "In given case, test of enduring benefit might break down". Coming to instant case, learned counsel submitted, it is only limited use of human brand equity and one-time payment is for augmentation of income in of human brand equity and one-time payment is for augmentation of income in Revenue field as object and effect of agreements show and statistics of year-wise earnings therefrom. It is advantage from services to be rendered by human beings, which can never be of enduring nature, as submitted hereinabove. Hence, payments are allowable in full in year of payment itself. Learned counsel submitted, assessee only procured services to be rendered by artists during agreed period and would have right to use their brand equity during such period; as such, it is not case of purchase of brand equity of artist. Learned counsel further submitted, lump sum payment made is not refundable and period of user is totally uncertain due to various factors such as popularity of artists, health of artists, etc. Coming to contention of learned Departmental Representative that payment is made for new and distinct business, learned counsel submitted, assessee and M/s Saraswati Audio Visuals (P) Ltd. (transferor-company) amalgamated with effect from appointed date, i.e. 1st Oct., 1994. This company was already in business of production, etc. of stage plays and entertainment. In scheme of amalgamation, under head "C. Rationale", it is stated under cl. 125 of object clauses, transferee-company is authorised to carry on business of transferor-company on following terms: "To carry on business of proprietors and managers of theatres (cinemas, picture-places and concert-halls) and to provide for production, representation and performance (whether by mechanical means or otherwise) of operas, stage plays, operettas, burlesques, vaudeville, revues, ballets, pantomimes, spectacular pieces, promenade and other concerts and other musical and dramatic performances and entertainments." In other words, learned counsel submitted, it is clear that M/s Saraswati Audio Visual (P) Ltd. was already in this line of business for quite long period and assessee was authorised to carry on business of transferor- company; hence, it is not correct to say that assessee has entered into new line of business. Even P&L a/c of M/s Saraswati Audio Visuals (P) Ltd. for earlier years clearly show that this was existing business and not new business as contended by learned Departmental Representative. Learned counsel further brought our attention to object clauses of transferor-company, which were also included in object clauses of memorandum of association of assessee. Relevant clauses are reproduced hereunder: "125. To carry on business of proprietors and managers of theatres (cinemas, picture-places and concert-halls) and to provide for production, representation and performance (whether by mechanical means or otherwise) of operas, stage plays, operettas, burlesques, vaudeville, revues, ballets, pantomimes, spectacular pieces, promenade and other concerts and other musical and dramatic performances and entertainments". "128. To carry on business of producers and presenters of and dealers i n plays, revues, opera, ballet, pantomimes, pageants, musical and dramatic works, and displays and entertainments of all kinds involving theatre, cinema, ice rinks, variety stage, music halls, radio, television, and other means of transmitting sound or pictorial effects, and to enter into any arrangements for management, conduct and control of any such business or businesses, and for supply of plays, opera and ballet works, dances, scripts, libertti, music, artistes, performers, musicians materials and other facilities, in India and elsewhere." (The above cl. 128 has been amended pursuant to resolutions passed at extraordinary general meeting held on 25th Feb., 1995 and to order of Company Law Board dt. 30th Aug., 1996) "128A. To carry on businesses of circus, concert-hall, cinema, ballroom, night-club, supper-club and as theatre proprietors and agents; box- office keepers, ticket agents, showmen and exhibitors, song, music, play, programme and general publishers and printers scene, proscenium and general painters and decorators; theatrical and musical agents and caters for public and private amusements and entertainments of every description. B. To carry on business of proprietors, managers and renters of theatres, dance halls, discotheques, film-producing studios, video and sound recording studios and radio and televisions studios; C. To carry on businesses of celebrity promotion and management, entertainment promotion and management, artistes promotion and management and generally as promoters, managers and representatives in all or any spheres of entertainment and sports; D. To provide on such terms as may seem expedient all or any of management, secretarial, advertising, publicity, accountancy, merchandising, personal and social facilities and services required or used in connection with their professional engagements by artistes and other engaged in theatrical, film, radio, television entertainment or supporting activities; E. To carry on business of literary, theatrical, advertising, publicity, press and employment agents, and to undertake and execute any agency or agencies, and in particular for authors, dramatists, composers, actors, musicians, singers, entertainers, sports personalities, theatre proprietors and managers, film and television producers or others; F. To carry on any business involving manufacture, marketing, sales, distribution of hardware and software related to computers, television broadcasting, terrestrial, satellite or otherwise, telemarketing, virtual reality, interactive television, multimedia in all forms including variations and future developments in any or all of above; G. To carry on business as distributors of, buyers and sellers of, and merchants and dealers in cinematograph films, records, tapes and apparatus for recording or reproducing sights and sounds, and all rights to produce, distribute or exhibit any performance, entertainment or event by means of films, records or such other apparatus; H. To carry on in all parts of world business of making, producing, exhibiting, distributing, renting, letting on hire and otherwise exploiting cinematograph and television films and motion pictures of all kinds, and to act as agents for purchase, sale, hiring and exploitation of such films, and generally to manufacture, buy, hire, sell, let on hire, produce or otherwise deal in cinematograph, television and other films and video recordings and photographic or other apparatus, articles, plant, machines and accessories capable of being used in that connection or in connection with cinematograph or television shows, exhibitions and entertainments; I. To act as agents in engaging, providing and employing of, artists, actors, singers, dancers, variety performers, sportsmen, lecturers, instructors, entertainers and any other persons or companies in connection with production, transmission and performance of scenarios, plays, operas, pantomimes, ballets, concerts, exhibitions, sports, entertainments, performances and amusements of any kind; J. To acquire and dispose of copyrights, licences and any other rights or interests in any literary, dramatic or musical work, and any poem, play, song, composition (musical or otherwise), cinematograph films, television programmes, picture, drawing, work of art or photograph, and to print, publish or cause to be printed or published anything of which company has copyright or right to print or publish, and to sell, distribute and deal with any matter so printed or published, and to grant licences or rights in respect of any property of company to any other person, firm or company." Learned counsel submitted, in light of above objects, it is true, though main objects of assessee, formerly known as M/s Sopan Leasing ( P ) Ltd. did not have these object clauses, but at same time it was specifically allowed and permitted under scheme. amalgamation does not leave any doubt that business was not new business or that it is not one of main objects. Coming to decisions cited by learned Departmental Representative, learned counsel submitted that all these cases can be classified into two categories. One category of cases deals with situations where expenditure in question was capital in nature for reason that expenditure resulted in acquisition of some assets. For example, in case of Jalan Trading Co. (P) Ltd. (supra), payment was made for acquiring by assignment right to carry on business of selling agency on long-term basis. In case of India Mfrs. (P) Ltd. (supra), payment in question was for acquisition of right for distribution of products for five years. Similarly, in case of Ramakrishna & Co. (supra), payment was towards consideration for acquiring right, title and interest in lease. Learned counsel submitted, these cases have got no relevance to case o f assessee inasmuch as by making lump sum payment to Shri Amitabh Bachchan and Smt. Jaya Bachchan, assessee has surrogated revenue expenditure and saved itself from incurring revenue payments in year under consideration as well other years. principle therefore applicable in case of assessee is not principle of acquisition of asset leading to capital expenditure but other principle laid down by Viscount Cave LC in Atherton s case (supra), wherein two principles are summarized. Learned counsel submitted, it is second principle that is relevant to case of assessee, i.e., "if what is got rid of by lump sum payment is annual business expense chargeable against revenue, lump sum payment should equally be regarded as business expense", Learned counsel further submitted, other decisions cited by learned Departmental Representative (mentioned hereinabove at p. 18, para 31) are also distinguishable. These cases deal with situation where payment was made for eliminating competition. Learned counsel submitted, in instant case of assessee, by making payment, assessee obtained services of artists for period of 120 days in each year over next ten years for purpose of its normal business activity, which were hitherto carried out by M/s Saraswati Audio Visual (P) Ltd. Therefore, learned counsel submitted, far from being payment in nature of stopping somebody from working, it is in fact payment made for obtaining services of artists. Learned counsel further submitted, contention of learned Departmental Representative that objects of assessee were financial and it was never in business of entertainment, etc., is irrelevant inasmuch as M/s Saraswati Audio Visual (P) Ltd. which was amalgamated resulting in its incorporation into assessee company, was very much in field of entertainment industry and in fact amalgamation specifies clearly that activities carried on by M/s Saraswati Audio Visual (P) Ltd. would be deemed to be carried on by assessee company. Learned counsel submitted that payment being made to get rid of recurring payment constitutes revenue payment and ought to be allowed as such. Replying to above, learned Departmental Representative submitted that it is true, M/s Saraswati Audio Visual (P) Ltd. amalgamated with ABCL. business of M/s Saraswati Audio Visual (P) Ltd. was never same as that of ABCL. In scheme of amalgamation only assets and liabilities were passed over to assessee company and not objects. M/s Sopan Leasing (P) Ltd. was only doing financing business. He particularly brought our attention to p. 39 of paper book. M/s Sopan Leasing (P) Ltd. was never in entertainment business. He submitted, this is so as there is clear finding by AO at p. 4 of his order, which reads "in instant case as discussed above, assessee s only source of income was dividend and interest...". Hearing rival submissions and going through orders of Revenue authorities, we are of view that issue has to go in assessee s favour. First, we will take up learned Departmental Representative s submission that payment was made for new and distinct business. Hereinabove, we have reproduced object clauses of memorandum of association vide para 49 of our order. Clause 125 authorises transferee- company to carry on business of transferor-company. Hence, this view canvassed by learned Departmental Representative is liable to be rejected. Coming to second proposition that payment received by artists, i.e., Shri Amitabh Bachchan and Smt. Jaya Bachchan has already been held as capital receipt in hands of recipients and therefore, it should naturally be treated as capital payment in hands of assessee as well, we find considerable force in arguments of learned counsel for assessee, placing reliance upon decision of Hon ble Supreme Court in case of Empire Jute Co. Ltd. (supra). relevant portion has already been quoted vide para 41 of our order. In case of Ciba of India Ltd. (supra), Hon ble Supreme Court held, since assessee did not under agreement become entitled exclusively even for period of agreement, mere access to technical knowledge/experience in pharmaceutical field can only be treated as revenue expenditure. Coming to facts in instant case of assessee, as rightly contended by learned counsel, if assessee had not paid lump sum amount, assessee was bound to make payment as and when engagements arose. Assessee retained senior artists. artists are human beings. It is difficult to equate performance of artists on par with use of some capital assets as such. In case of Alembic Chemical Works Co. Ltd. (supra), Hon ble Supreme Court held, assessee engaged in manufacture of antibiotics including penicillin for acquisition of know-how, made certain payments to foreign party. There was no evidence to indicate that this was not in line of existing business of assessee. Hence, Hon ble Supreme Court held, this is payment once for all, yet not capital in nature. Coming to instant case of assessee, we have already hereinabove mentioned that M/s Saraswati Audio Visual (P) Ltd. was in field of entertainment business. As such, it is difficult to hold that assessee was also not in field after amalgamation, as approved by jurisdictional High Court. It is true, as contended by learned Departmental Representative that AO stated at p. 4, assessee s only source of income was dividend and interest, but this finding of AO does not bring out facts in entirety. Learned counsel for assessee has rightly distinguished decisions n d same have been already reflected in arguments of learned counsel. In case of Ramakrishna & Co. (supra), assessee acquired right, title and interest by virtue of certain lease deeds in respect of cinema theatre and made payments. Undoubtedly, payment to acquire right, title and interest exclusively of cinema theatre can only be treated as acquisition of source itself; whereas payment to Shri Amitabh Bachchan and Smt. Jaya Bachchan, artists, in our view, is payment for use of their artistic talents. It is not acquisition of source itself. Source will exist independently and they are also free to perform for others except time and duration which is acquired by assessee by virtue of these payments. In case of Devidas Vithaldas & Co. (supra), P, chartered accountant, took another partner A, reserving himself exclusively goodwill. partnership was dissolved subsequently. By virtue of deed of dissolution, business was to be carried on by A, whereas goodwill was exclusively belonging to P and for acquisition of goodwill certain payments were made. This was treated as capital by High Court and reversing order, Hon ble Supreme Court held, transaction under deed of dissolution was licence and not sale of goodwill and payments were in nature of royalty and had to be considered as admissible deduction. In instant case of assessee, it is true, agreement is for ten years. For each year artists are exclusively available to assessee. At same time we have to see that for remaining days over entire period of ten years they are free to perform for others. only difference is that for performance of 120 days in year for ten years, payment is made in lump sum. It is agreement to pay for performance and assessee has no exclusive hold on them. Assessee is free to enter into agreement with other artists even for similar nature of performance. Had assessee engaged artists without this agreement for each and every engagement, assessee has to make independent payment? Here, payment is consolidated and paid in lump sum. By making this payment in lump sum assessee in fact saved recurring payment, which is otherwise to be treated as revenue payment. It is one of contentions of learned counsel for assessee that in fact very performance of artist, work of human being cannot be equated with work of any capital as such. It is full of uncertainties like dip in popularity, unforeseen reasons, health problems, etc. In case of B. W. Noble Ltd. (supra), we have noted hereinabove observation of His Lordship Rowlatt, that payment to get rid of servant when it is not expedient to keep him in interest of trade is deductible expenditure being payment to remove recurring disadvantage. His Lordship held that payment made to remove such disadvantage is not payment made to acquire enduring advantage. In reverse, same principle is applicable here. Here, assessee made payment to avail performance of artists when it is expedient to get artists in interest of trade and therefore same is deductible expenditure. payment made to avail possibility of same is deductible expenditure. payment made to avail possibility of advantage should be considered as payment made to remove possible disadvantage and it is not payment to acquire enduring advantage. same principle was reiterated by Hon ble Bombay High Court in case of Champion Engg. Works Ltd. (supra). observation of Hon ble High Court has been quoted hereinabove vide para 38. In view of above, we are of opinion that cross-objection by Revenue is liable to be dismissed. Coming to assessee s appeal, it is directed against order of CIT(A) in directing AO to assess amount of Rs. 18 crores (Rs. 15 crores to Shri Amitabh Bachchan and Rs. 3 crores to Smt. Jaya Bachchan), paid as per agreement, as revenue expenditure, but spreading deduction equally over period of ten years being tenure of agreement. According to assessee, on facts and circumstances of case and i n law, CIT(A) ought to have allowed deduction for sum of Rs. 18 crores in asst. yr. 1995-96 itself, in which liability for same incurred. It is also case of assessee that CIT(A) went wrong in applying ratio of decision of Hon ble Gujarat High Court in Anup Engg. Ltd. vs. CIT (1991) 98 CTR (Guj) 109: (1991) 192 ITR 633 (Guj) and decision of Hon ble Supreme Court in Madras Industrial Investment Corpn. Ltd. vs. CIT (1997) 139 CTR (SC) 555: (1997) 225 ITR 802 (SC) in support of conclusion he arrived at to spread over payment equally over ten years. facts have already been narrated in detail while dealing with cross- objection by Revenue, which we have dismissed. Now, coming to facts in brief, leading to dispute, though CIT(A) treated payment of Rs. 18 crores to Shri Amitabh Bachchan and Smt. Jaya Bachchan, artists, as revenue expenditure in hands of assessee, following decision of Hon ble Gujarat High Court in case of Anup Engg. Ltd. (supra) and decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra), he directed AO to allow deduction spread over for entire period of ten years, being tenure of agreement itself. Learned counsel for assessee submitted, conclusion arrived at by t h e CIT(A) is not tenable. Learned counsel submitted, learned CIT(A) conveniently omitted to reproduce first four lines of very para which he quoted from decision of Hon ble Supreme Court, to decide issue partly against assessee, saying that payment should be allowed as deduction, spreading over contract period of ten years. Learned counsel brought our attention to following observation of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra): "Ordinarily, revenue expenditure which is incurred wholly and exclusively for purpose of business must be allowed in its entirety in year in which it is incurred. It cannot be spread over number of years even if assessee has written it off in his books, over period of years." After this observation, Hon ble Supreme Court further continues "However, facts may justify assessee who has incurred expenditure in particular year to spread and claim it over period of ensuing years. In fact, allowing entire expenditure in one year might give very destroyed picture of profits of particular year. Issuing debentures is instance where, although assessee has incurred liability to pay discount in year of issue of debentures, payment is to secure benefit over number of years. There is continuing benefit to business of company over entire period. liability should, therefore, be spread over period of debentures." Learned counsel submitted, first four lines of para, omitted by CIT(A), clearly lays down that any revenue expenditure which is incurred wholly and exclusively for purpose of business must be allowed in its entirety in year in which it is incurred. It cannot be spread over number of years even if assessee has written it off in his books, over period of years. CIT(A) relied upon portion of judgment which under certain circumstances gives option to assessee to claim it over period of ensuing years as words used are "However, facts may justify assessee who has incurred expenditure in particular year to spread and claim it over period of ensuing years". Hence, learned counsel submitted, this decision of Hon ble Supreme Court, on contrary, supports case of assessee that entire amount of Rs. 18 crores in year under appeal was incurred wholly and exclusively for purpose of business and therefore allowable in year under consideration. Learned counsel further submitted, issuing debentures at discount is instance where, although assessee has incurred liability to pay discount in year of issue of debentures, payment is to secure benefit over number of years. In fact, allowing entire expenditure in one year may give very distorted picture of financial position of particular year. case before Hon ble Supreme Court was in relation to discount on debentures issued and there was user of funds and stream of income over period. There were no uncertainties like uncertainties inherent in respect of services to be rendered by human beings, involved therein as they are involved in present case. In present case, there is no certainty as to whether any benefit or advantage extending or stream of income over period of agreement, like in case of user of funds raised from debentures issued. Learned counsel further submitted that assessee company entered into two separate agreements dt. 10th Jan., 1995 with Shri Amitabh Bachchan and Smt. Jaya Bachchan for procuring their services and right to use their brand equity for agreed period, to enhance business prospects of assessee. Certain t e r m s of aforesaid agreements were modified by supplementary agreement dt. 11th Feb., 1995, which are placed at paper book, pp. 152 to 185 (with Shri Amitabh Bachchan) and pp. 186 to 215 (with Smt. Jaya Bachchan). Inviting our attention to cl. 3 of agreement (p. 163 of paper book), learned counsel submitted, lump sum payment is for assignment as contemplated in said clause, whereby artists assign to corporation entire copyright and all other rights of whatsoever nature, which comes into existence from performance of engagements and products of engagements, and in any work in which copyright subsists or may come into existence, whether now known or in future created, to which artist is now or may at any time after this agreement but during period of ten years entitled to, belong to assessee company and not to artists. assignment is absolute and complete in respect of aforesaid rights of assignment is absolute and complete in respect of aforesaid rights of artists now and will be entitled to during ten years duration, period of agreement. Whatever copyrights whether existing or will come into existence in future are given away today including something which may or may not happen in future. As such, assignment is here and now of events, which may or may not come into existence in future. Learned counsel further submitted, cl. 4 of agreement (p. 166 of paper book) provides for payments in addition to guaranteed payment for all other rights, which are defined in cl. 6 "artist s warranties and obligations" (p. 169 of paper book). These payments represent full and final consideration for rights assigned (as per cl. 6), engagements and all products of engagements and shall include any or all residual, repeat, re-run, foreign use and exploitation. Therefore, lump sum payment is for assignment contemplated in cl. 3, which is now and complete today and payment as per cl. 4 is for different purpose. Hence, learned counsel submitted, event of assignment, for which lump sum payment has been made, occurred today on entering into agreement and not over agreement period of ten years. Learned counsel further submitted, cls. 12 and 13 (p. 175 of paper book) "termination and effects of termination", provide that if artist fails to perform or observe or breaches any of obligations, undertakings or warranties or if corporation fails to pay consideration in terms thereof, agreement shall be terminated. These obligations and considerations are referred to in cl. 6 and cl. 4 of said agreement. Learned counsel submitted, cl. 13.1 (p. 176 of paper book) states that artist shall continue to comply with all obligations on part of artist under this agreement which are not affected by termination. Clause 13.2 states that even after termination, corporation shall remain entitled to all rights granted or assigned to corporation under agreement and all other rights relating to engagements of artists and all products of engagements. Hence, learned counsel submitted, assignment under cl. 3 is absolute and is completed on entering into agreement, then and there. It is not affected by events occurring afterwards or by termination. Learned counsel further submitted, lump sum payment is for obligation on part of artists (cl. 3 of agreement), which is not affected by termination but all other payments will be affected. Learned counsel further submitted, Revenue s contention that payment made is to secure benefit over period of ten years is based on observation of CIT(A), wherein reliance was placed upon findings of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra) that there is continuing benefit to business of assessee company over entire period of ten years. Learned counsel submitted, however, argument that agreement was for ten years; copyright is for future, engagement is for ten years and therefore expenditure should be spread over equally over period of ten years, does not hold good. He submitted, this is because, in this case assignment is here and now of events which may come into existence in future. Hence, assignment is completed now; it is for events, which may occur during ten years after agreement. Learned counsel submitted, for example, in case of annuity policy of life insurance, lump sum amount paid for receiving annuity over period of ten years. contract is complete when lump sum payment is made. Similarly, in instant case also, assignment is complete in year of agreement and it is events, which may happen or arise during period of ten years. Learned counsel further submitted, in case of Madras Industrial Investment Corpn. Ltd. (supra), decision was rendered in context of discount on issue of debentures. expenditure incurred in granting discount on issue of debentures is to enable issuing company to enjoy benefits of funds raised through debenture issue for period of debentures. Thus, intention is to secure benefit over life of debentures, as observed by Hon ble Supreme Court at p. 813, which reads as under: "Issuing debentures at discount is another such instance where, although assessee has incurred liability to pay discount in year of issue of debentures, payment is to secure benefit over number of years. There is continuing benefit to business of company over entire period. liability should, therefore, be spread over period of debentures." Learned counsel submitted, benefit derived by company over period of debentures is in form of availability of funds for use in business. funds available for use, those of company, over life of debentures, can be correctly ascertained. On other hand, benefit derived by ABCL by virtue of payments made to artists, under agreements entered into with them, are not definite or ascertainable over term of agreements to warrant pro rata spread over. Learned counsel submitted, unlike money, value of right to use artists brand equity is not constant. Such value depends on value of brand equity itself, which in turn is dependant upon several variable and volatile factors like health and personality of artist, artist s image in public eye and perception, likes and dislikes of masses. Even single event, act or deed may render brand equity of artist obsolete, which in turn would affect value of right to use such brand equity or benefit which can be derived or obtained from use of such brand equity. In fact, there was lengthy period during which brand equity in this very case yielded no benefit to assessee. In case of discount on issue of debentures, learned counsel submitted, amount of discount is nothing but interest, which is revenue expenditure. It is rent for use of money. There is continuing benefit to business of company. Accordingly, spread over of amount of discount over period of debentures is justified. However, that is not so in instant case of assessee, involving right to use brand equity. Hence, decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra) insofar as it deals with spread over of discount is not applicable to facts in instant case of assessee. Sec. 37(1) of IT Act, 1961, also does not provide for deferment of expenditure, as can be observed from decision of Hon ble Supreme Court in same case of Madras Industrial Investment Corpn. Ltd. (supra), wherein it was held as under: "Ordinarily, revenue expenditure which is incurred wholly and exclusively for purpose of business must be allowed in its entirety in year in which it is incurred. It cannot be spread over number of years even if assessee has written it off in his books, over period of years". Learned counsel submitted, however, Hon ble Supreme Court created exception to above rule in case of Madras Industrial Investment Corpn. Ltd. (supra), keeping in view peculiar facts of case, which are very different from facts of instant case of assessee. Learned counsel further submitted that entire sum paid by assessee to artists, being revenue expenditure, should be entirely allowed as deduction in year in which it was incurred. Learned counsel further submitted, when debenture is issued, risk is reflected in pricing or in rate of interest at which debentures are issued. In instant case, assessee is sole bearer of risks resulting from payment under agreement. In other words, in this case payer is bearing risk and not payee; whereas in case of Madras Industrial Investment Corpn. Ltd. (supra) it was payee who was bearing risk. Learned counsel further submitted, in instant case of assessee, assessee has incurred expenditure, which is bearing risk and not artist, Shri Amitabh Bachchan or Smt. Jaya Bachchan, receiver of payment. risk was undertaken in year in which expenditure was incurred; as such, it is to be allowed in year of incurrence. Referring to decision of Hon ble Bombay High Court in case of Taparia Tools Ltd. vs. Jt. CIT (2003) 180 CTR (Bom) 256: (2003) 260 ITR 102 (Bom), learned counsel submitted, in this case debentures were allotted to six parties. As regards to payment of interest, option was given of periodically receiving interest on half-yearly basis @ 18 per cent per annum for five years or one year upfront payment of Rs. 55 per debenture immediately on allotment. Parties 1 and 6 opted for one year upfront payment while parties 2 to 5 opted for periodic interest. In return, assessee claimed full deduction of entire amount of upfront payment, whereas in books of account it was shown as deferred revenue expenditure and amount was proportionately written off over period of five years. life of non-convertible debenture was five years and stream of income was coming in over period of five years against one-time upfront payment of interest. As such, there was distortion of profit, whereas in case of other four parties, claim of deduction of interest is made in five years, i.e., as and when interest is paid. i.e., as and when interest is paid. Learned counsel further submitted in case of Taparia Tools Ltd. (supra), term "matching concept" was discussed on p. 116 and distortion of profits resulting from claim of assessee. Hon ble High Court observed as under: "......... Therefore, under mercantile system of accounting, in order to determine net income of accounting year, revenue and other incomes are matched with cost of resources consumed (expenses). Under mercantile system of accounting, this matching is required to be done on accrual basis. Under this matching concept, revenue and income earned during accounting period, irrespective of actual cash inflow, is required to be compared with expenses incurred during said period, irrespective of actual out-flow of cash. In this case, assessee is following mercantile system of accounting. This matching concept is very relevant to compute taxable income particularly in cases involving DRE." Learned counsel further submitted, on very same p. 116, while referring to decision of Hon ble Supreme Court in case of Calcutta Co. Ltd. vs. CIT (1959) 37 ITR 1 (SC), jurisdictional High Court observed as under: "... It was held by Supreme Court that expression profits or gains in s. 10(1) of Indian IT Act, 1922, should be understood in its commercial sense and there can be no computation of such profits and gains until expenditure, which is necessary for purposes of earning receipts is deducted therefrom. Accordingly, Supreme Court took view that since assessee was following mercantile system of accounting and since assessee had credited full sale price of lands in its accounts amounting to Rs. 43,692, assessee was entitled to estimate expenditure because without such estimation of expenditure, it was not possible to compute profits and gains. This concept is also applied by Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (1997) 139 CTR (SC) 555: (1997) 225 ITR 802 (SC)...." Learned counsel submitted, in instant case of assessee, there is no guaranteed revenue against one-time guaranteed payment of Rs. 18 crores. This is payment for services of artists, which is dependent on artists public standing. There may be health problems or uncertainty of life; as such there is no steady stream of income to match one-time guaranteed payment. Learned counsel further submitted, in case of CIT vs. Bhor Industries Ltd. (2003) 180 CTR (Bom) 508: (2003) 264 ITR 180 (Bom), which distinguished decision in case of Taparia Tools Ltd. (supra), it was held that VRS expenses were incurred by company to save expense. It is well-settled, ordinarily, revenue expenditure, which is incurred wholly and exclusively for purposes of business, (which) must be allowed in its entirety in year in which it is incurred and it cannot be spread over number of years even though assessee written it off in its books over period of years. It is only in cases of special type of assets that spread over is warranted. At p. 184, while distinguishing decision in case of Taparia Tools Ltd. (supra), Hon ble High Court observed that "to attract concept of spread over of VRS expenses there ought to be income stream coming in order to match expenditure, which is not present here. Therefore, matching concept discussed in Taparia Tools Ltd. does not apply here". Learned counsel submitted, both decisions of jurisdictional High Court in case of Taparia Tools Ltd. (supra) and in case of Bhor Industries Ltd. (supra), were given by same Hon ble Judge on 8th Jan., 2003 and 26th Feb., 2003, respectively i.e., within interval of one month. Learned counsel submitted, claim of assessee is allowable in year of payment itself, as held in following decisions, which were cited before Revenue authorities as well: "(1) CIT vs. Associated Cement Co. Ltd. (1988) 70 CTR (SC) 28: (1988) 172 ITR 257 (SC). In this case amount spent by assessee under agreement with Government/municipality on providing water pipelines for supply of water; transmission line for lighting municipality; and to concrete main road from factory to station in consideration of non-payment of municipal rates/taxes for period of 15 years was allowed. It was held that since assets were of municipality and since advantage obtained by assessee was absolution of immunity from liability to pay municipal rates/taxes for period of 15 years, which liability would have been allowed on revenue account if they had to be paid and therefore, advantage secured was in field of revenue and hence allowable." Learned counsel submitted, in instant case also, advantage obtained by assessee is in field of revenue as it has paid in lump sum, for partial user of brand equity for ten years instead of what would have been paid by assessee transaction-wise during that period with added risk of hike in rates by artists. Such payments if paid from year to year would have been allowable as revenue expenses; as such, advantage secured is in field of revenue and hence lump sum payment is also on revenue account and allowable in year of payment itself. In case of Associated Cement Co. Ltd. (supra), even 15 years were not considered by Hon ble Supreme Court to be enduring period; whereas in instant case it is only ten years. "(2) Empire Jute Co. Ltd. vs. CIT (1980) 17 CTR (SC) 113: (1980) 124 ITR 1 (SC). Under Indian Jute Mills Association agreement was entered into by jute mills restricting hours per week, for which mills could work their looms. However, mills were allowed to transfer their allotment of hours of work per week to other mills for payment received. This payment made by assessee was held by Hon ble High Court to be capital expenditure. Hon ble Supreme Court reversed said decision holding that expenditure was revenue in nature as it was made for operating its looms for longer hours with view to increasing its profits, observing as under: There may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, nonetheless, be on revenue account and t h e test of enduring benefit may break down. It is not every advantage of enduring nature acquired by assessee that brings case within principle laid down in this test. What is material to consider is nature of advantage in commercial sense and it is only where advantage is in capital field that expenditure would be disallowable on application of this test. If advantage consists merely in facilitating assessee s trading operations or enabling management and conduct of assessee s business to be carried on more efficiently or more profitably while leaving fixed capital untouched, expenditure would be on revenue account, even though advantage may endure for indefinite future. test of enduring benefit is, therefore, not certain or conclusive test and it cannot be applied blindly and mechanically without regard to particular facts and circumstances of given case. What is outgoing of capital and what is outgoing on account of revenue depends on what expenditure is calculated to effect from practical and business point of view rather than upon juristic classification of legal rights, if any, secured, employed or exhausted in process. question must be viewed in larger context of business necessity or expediency. Learned counsel submitted, case of assessee squarely falls within ratio of above decision, which does limit period of advantage if it is in revenue field. Even if it is considered case of advantage of enduring benefit, benefit obtained by assessee is in commercial field and not in capital field. services of artists are obtained for ten years only for facilitating assessee s business operations and for increasing its profitability. He further submitted, services of artists were available only for 120 days in year and they were free to work elsewhere on other days. Thus, payment made is only for partial user of brand equity of artists and not for acquisition thereof and hence it is allowable as revenue expenditure in year of payment itself as it is clearly on revenue account, incurred with view to increasing profits of assessee. "(3) CIT vs. Ciba of India Ltd. (1968) 69 ITR 692 (SC). In this case payment made by assessee for non-exclusive user of patents and trademark and for access to technical knowledge and experience in pharmaceutical field of t h e Swiss company for period of five years was allowed as revenue expenditure as assessee had obtained only right to draw upon technical knowledge of Swiss company for limited period, for purposes of its business. Neither Swiss company had parted with any assets nor did assessee acquire any asset or advantage of enduring nature." Learned counsel submitted, in instant case of assessee also assessee had acquired only right to user of brand equity of artists for limited period and that too only for 120 days in year during agreement period of ten years. No asset was acquired by assessee and advantage was in revenue field; as such, payment is allowable in full in year of payment itself. Learned counsel further submitted, abovementioned three decisions of Hon ble Supreme Court are in respect of loom hours, trademarks, water & electric lines and patents/trademarks, respectively and even then they have been decided in favour of assessees. instant case of assessee is in respect of services to be rendered by human beings, which by their very nature cannot be of "enduring nature". Hence, advantage obtained from such human services can never be of enduring nature. Learned counsel further referred to decision of Tribunal in case of Reliance Industrial Infrastructure Ltd. vs. Jt. CIT (2002) 75 TTJ (Mum) 606, wherein it was held that merely because in books of account assessee wrote off on average basis over period of 15 years, deduction of lease rent as claimed by assessee on strength of contractual liability as per agreement cannot be defeated. Replying to above, learned Departmental Representative submitted, contention of learned counsel that decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra) cannot be applied is contention without merit. In instant case of assessee, learned Departmental Representative submitted, this decision is clearly applicable. He invited our attention to cl. 13, which deals with effect of termination. It reads as under: "13. Effect of termination following provisions shall apply on and after notice of termination by corporation: artist shall continue to comply with all of obligations on part of which are not affected by termination. corporation shall remain entitled to all rights granted or assigned to corporation under this agreement and all other rights relating to engagements of artist and all products of engagements. artist shall be entitled only to such consideration as shall have accrued due and become payable, payable pro rata on date of termination." Learned Departmental Representative submitted, reading of above clause makes it clear that Shri Amitabh Bachchan and Smt. Jaya Bachchan are perpetually bound by this agreement. artists are allowing corporation to exploit. risk is of corporation and not of artists. In addition to lump sum payment, there are annual payments and separate payment for films. In other words, payment is for nothing but to give right to corporation t o exploit them. Again, learned Departmental Representative brought our attention to decision of Hon ble Calcutta High Court in case of Hindustan Aluminium Corpn. Ltd. vs. CIT (1982) 30 CTR (Cal) 363: (1983) 144 ITR 474, 480 (Cal), portion reads as under: "As mentioned hereinbefore, on behalf to Revenue, two main contentions were urged before Tribunal and those were repeated before us, viz., that by entering into agreement in question in respect of which payments were claimed as deduction in year in question, assessee had secured capital assets and, therefore, this should be in capital account and would not be allowed as revenue expenditure. It was, secondly, contended that spread over of expenditure could not be claimed in particular year in question with which we are concerned. We must observe that this expenditure in question must be understood in light of all other clauses that we have set out hereinbefore. All other agreements assessee company had entered into were for procuring or securing its rights of permanent nature and company was capitalizing expenditure in its accounts, like invention, erection of factory, fabrication of plant, etc., which we have mentioned hereinbefore. It may be important in this connection, though we are not concerned with other agreements, to refer to some of clauses of other agreements. first agreement was dt. 1st Jan., 1960. It is not necessary to refer to all articles. Article V dealt with description of services rendered by foreign company. Clause 1 of arti. V stated as follows...." In light of above, learned Departmental Representative submitted, learned CIT(A) was justified in holding that expenditure should be spread over period of ten years, that is to say, period of agreement. Learned Departmental Representative further brought our attention to decision of Hon ble Delhi High Court in case of CIT vs. Printpak Machinery Ltd. (2000) 164 CTR (Del) 581: (2001) 248 ITR 684 (Del), particular p . 688, wherein Hon ble High Court discussed decision of Hon ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra). Learned Departmental Representative submitted, whether particular expenditure is revenue expenditure incurred for purpose of running business must be determined on consideration of factual position and by application of principles of commercial trading. question must be viewed in larger context of business necessity or expediency. Learned Departmental Representative further submitted, inviting our attention to decision of jurisdictional High Court in case of Taparia T o o l s Ltd. (supra), that it is necessary under mercantile system of accounting, in order to determine net income of accounting year, revenue and other income must be matched with cost of resources consumed. Under this matching concept, revenue and income earned during accounting period irrespective of actual cash flow, is required to be compared with expenses incurred during period irrespective of actual out-flow of cash. This matching concept is very essential to compute taxable income, particularly in cases involving deferred revenue expenditure. learned Departmental Representative again brought our attention to decision of Tribunal in case of Asstt. CIT vs. Amtrex Appliances Ltd. (2005) 94 TTJ (Ahd) 396, wherein Tribunal spread over expenditure claimed over period of five years since it was in accordance with accepted accounting practice, which was also not contrary to any of provisions of IT Act. Hence, learned Departmental Representative submitted, order of CIT(A) is to be upheld because spread over is to be seen on basis of facts in each and every case and there is no general principle that it should be allowed in very same year. Inviting our attention to paper book p. 24, which is P&L a/c for year ended 31st March, 1995, learned Departmental Representative submitted, in this year, assessee had large profit and assessee is claiming entire deduction of Rs. 18 crores. If this deduction of Rs. 18 crores is allowed as assessee s expenditure, what is left over is about Rs. 3 crores, which itself indicates that assessee is trying to have advantage, which distorts actual figure. Hence, learned Departmental Representative submitted, order of learned CIT(A) is to be upheld. Replying to above, learned counsel submitted, in decision relied by learned Departmental Representative in case of Printpak Machinery Ltd. (supra), question was of allowability of expenditure on obtaining technical know-how for five years in its entirety in year of incurrence; whereas in instant case of assessee, question is not of technical advisor but of artist, whose services are not consistent. Learned counsel further submitted, even facts of other case law relied by learned Departmental Representative in case of Hindustan Aluminium Corpn. Ltd. (supra) and in case of Amtrex Appliances Ltd. (supra), are not similar to assessee s case; s such, these decisions do not apply to instant case of assessee. Learned counsel submitted that as reciprocal obligations between assessee and Shri Amitabh Bachchan and Smt. Jaya Bachchan having been undertaken, accepted and acted upon in year under consideration and are indefeasible on both sides even in event of termination of agreement, guaranteed payment is deductible in toto in year of agreement. We have heard rival submissions, gone through orders of Revenue authorities and decisions cited by contending parties. We are of view that issue has to go in assessee s favour. As rightly contended by learned counsel for assessee, decision relied by learned CIT(A) in case of Madras Industrial Investment Corpn. Ltd. (supra), does not support case of Revenue. omitted part of same para, which has been reproduced hereinabove, makes it clear that if assessee claims expenditure incurred wholly and exclusively for business purpose in normal course, it should be allowed in very same year. Hon ble Supreme Court further held that it cannot be spread over number of years even if assessee has written it off in its books of account over period of years. This observation makes it clear that this cannot be allowed so because assessee might be doing this purposely with intention to have distorted figure and claim benefit or assessee s liability to pay tax may get distorted picture. In instant case of assessee, there is no evidence before us to show that this is actually intention of assessee. In year under consideration expenditure is incurred and assessee is claiming it. case relied upon by Revenue was in connection with issuing debentures at discount. Hon ble Supreme Court held that payment is to secure benefit over number of years and assessee was getting continuing benefit to business for entire period. decision went against assessee on particular facts. decision of Hon ble Supreme Court relied upon by learned counsel, in case of Associated Cement Companies Ltd. (supra) supports assessee s case. In this case assessee had agreement with Government and municipality for providing water pipelines, for providing transmission lines and to concrete road from factory to station in consideration of non-payment of municipal rates spread over for period of 15 years. Hon ble Supreme Court held that this is advantage secured but in field of revenue; hence allowable. As rightly contended by learned counsel, services of artists are obtained for ten years but for facilitating their continued co-operation, which will go to increase assessee s profitability. It is for 120 days in year and artists were free to work anywhere else. It is for user of brand equity and not acquisition as such. Coming to decision relied upon by learned Departmental Representative in case of Printpak Machinery Ltd. (supra), question was allowability of expenditure on technical know-how for five years. At p. 688, Hon ble Delhi High Court held that s. 37(1) of Act requires that expenditure should not be of capital nature. Court held, question whether particular expenditure is revenue, incurred for purpose of business, must be determined on consideration of factual position, business, must be determined on consideration of factual position, applying principles of commercial trading and question should be considered from larger context of business necessity and expediency. If outgoing or expenditure is related to carrying on or conduct of business, then it may be regarded as part of profit-making process and not for acquisition of asset or right of permanent character, possession of which is condition of carrying on of business, expenditure in such case may be regarded as revenue expenditure. We have already held hereinabove that payment made to artists was not of capital nature because it was for user of talents and not for acquisition of capital as such. Coming to decision relied upon by learned Departmental Representative in case of Hindustan Aluminium Corpn. Ltd. (supra), it is again payment for securing technical assistance and training of personnel. Hon ble Calcutta High Court held that this is not capital expenditure. assessee itself sought to spread this expenditure over 20 years and Their Lordships allowed it. In view of above, we are of view that expenditure as claimed by assessee is to be allowed in year of payment itself. Order accordingly. In result, appeal of assessee stands allowed and cross- objection of Revenue stands dismissed. *** AMITABH BACHCHAN CORPN. LTD. v. DEPUTY COMMISSIONER OF INCOME TAX