JUDGMENT judgment of court was delivered by K. S. Radhakrishnan Actg. C. J. This matter has been placed before us on reference made by Division Bench after having doubted correctness of Bench decision of this court in CIT v. Steel Complex Ltd. [1999] 238 ITR 1054, wherein this court has taken view that expenditure incurred on installation of water treatment plant and fume extraction plant is revenue expenditure and not capital expenditure. referring Bench opined that asset created is of durable nature and its maintenance and operating cost only could be called revenue expenditure while investment could only be capital. assessee is private limited company engaged in business of manufacture of latex and such other rubber products. During financial year 1990-91 assessee installed water pollution treatment plant spending amount of Rs. 4,31,017 in due compliance with direction of Kerala State Pollution Control Board. For year ended March 31, 1991, relevant to assessment year 1991-92, return of income was furnished by assessee on December 30, 1991, showing net income of Rs. 4,28,840. assessee had stated that it expended amount of Rs. 4,31,017 for installation of water treatment plant and claimed it as revenue expenditure. assessing authority took view that water treatment plant is asset of permanent nature and has come into existence with enduring advantage to assessee and amount expended for same is in nature of capital expenditure. Further it is also noticed that Income-tax Rules prescribed certain conditions for depreciation on water treatment plant and air pollution control equipment thereby granting certain percentage of depreciation to such plant and machinery acquired or installed by assessee. Aggrieved by order of assessing authority, assessee took up matter in appeal before Commissioner of Income-tax (Appeals). Commissioner allowed appeal placing reliance on decision of Income-tax Appellate Tribunal, Cochin Bench, in Steel Complex Ltd. v. Deputy CIT (Asst.), Special Range in I.T.A. No. 792/(Coch)/1989 dated June 26, 1991, and assessing authority was directed to treat expenditure as revenue expenditure. Aggrieved by order of Commissioner, Revenue took up matter in appeal before Income-tax Appellate Tribunal. Tribunal placing reliance on Bench decision of this court in Steel Complex Ltd. s case [1999] 238 ITR 1054, held that expenditure incurred for establishment of water treatment plant is revenue expenditure and hence allowable deduction. appeal filed by Revenue was therefore dismissed against which this appeal has been preferred. Sri George K. George, standing counsel appearing for Revenue, submitted that Tribunal has committed error in holding that expenditure incurred for installation of water treatment plant is revenue expenditure. Counsel submitted that principle laid down by apex court in Alembic Chemical Works Co. Ltd. v. CIT [1989] 177 ITR 377 was not correctly applied by this court while arriving at that conclusion. Counsel submitted that water effluent plant is of permanent nature with enduring advantage to assessee and fact that due to installation of plant production or manufacture has not been increased is not relevant consideration but question is whether expenditure incurred for installation of same derives any enduring benefit to assessee. Counsel also placed reliance on decision of Rajasthan High Court in Jaswant Trading Co. v. CIT [1995] 212 ITR 293 and submitted that payment for water treatment plant is capital expenditure. Counsel appearing for assessee, Smt. Molly Jacob on other hand contended that installation of water treatment plant has not in any way enhanced production of centrifuged latex and it has not contributed any improvement in quality of product and it cannot be said that expenditure incurred for installation of plant is capital in nature. Counsel submitted that principle laid down by apex court in Alembic Chemical Works Co. s case [1989] 177 ITR 377 has been correctly applied in Steel Complex Ltd. s case [1999] 238 ITR 1054 (Ker) warranting no interference and S. L. P. (Civil) C. C. 8802 of 1998 filed against that judgment by Commissioner of Income-tax, Cochin was dismissed by apex court. Counsel submitted that this court has correctly applied principle laid down in above judgment and has come to correct conclusion that expenses incurred for installation of effluent treatment plant is revenue expenditure. question whether particular expenditure incurred by assessee is of capital or revenue nature is always complex and intricate issue and it is not surprising that no one test or principle or rule of thumb is paramount in deciding such issues. Such question has to be answered in light of all circumstances which are reasonable to take into account and weight which must be given to particular circumstance in particular case must depend rather on common sense than on strict application of any single legal principle. apex court in CIT v. Associated Cement Companies Ltd. [1988] 172 ITR 257 held that there may be cases where expenditure, even if incurred for obtaining advantage of enduring benefit, may, none less, be on revenue account and test of enduring benefit may break down. It is not every advantage of enduring nature acquired by assessee that brings case within principles 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. In Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 apex court laid down simple test for determining nature of expenditure and held as follows (page 45): If expenditure is made for acquiring or bringing into existence asset or advantage for enduring benefit of business it is properly attributable to capital and is of nature of capital expenditure. If, on other hand, it is made not for purpose of bringing into existence any such asset or advantage but for running business or working it with view to produce profits, it is revenue expenditure. If any such 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 and for all or was made periodically. aim and object of expenditure would determine character of expenditure whether it is capital expenditure or revenue expenditure. All same court observed that it is difficult to lay down test which would apply to all situations. One has therefore to apply criteria from business point of view in order to determine whether on fair appreciation of whole situation expenditure incurred for particular matter is in nature of whole situation expenditure incurred for particular matter is in nature of capital expenditure or revenue expenditure. Again in K. T. M. T. M. Abdul Kayoom v. CIT [1962] 44 ITR 689 apex court reiterated that each case depends on its own facts and close similarity between one case and another is not enough, because even single significant detail may alter entire aspect. court observed that what is decisive is nature of business, nature of expenditure, nature of right acquired and their relation inter se, and this is only key to resolve issue in light of general principles which are followed in such cases. In Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965] 56 ITR 52 apex court basing on facts and circumstances of case held that assessee s claim was not admissible, as expenditure was related to acquisition of asset or right of permanent character possession of which was condition for carrying on business. Relying on various decisions of apex court as well as of English courts apex court in Alembic Chemical Works Co. s case [1989] 177 ITR 377, 379) held as follows: In infinite variety of situational diversities in which concept of what is capital expenditure and what is revenue arises, it is well nigh impossible to formulate any general rule, even in generality of cases, sufficiently accurate and reasonably comprehensive, to draw any clear line of demarcation. However, some broad and general tests have been suggested from time to time to ascertain on which side of line outlay in any particular case might reasonably be held to fall. These tests are generally efficacious and serve as useful servants, but as masters they tend to be overexacting. In Alembic Chemical Works Co. s case [1989] 177 ITR 377 (SC), question examined by apex court was whether assessee engaged in manufacture of antibiotics and penicillin has acquired know-how to produce higher yield and sub-culture of high yielding strain of penicillin and whether expenditure incurred for that is revenue expenditure or capital expenditure. court held that there was no material for Tribunal to hold that area of improvisation was not part of existing business or that entire gamut of existing manufacturing operations for commercial production of penicillin in assessee s existing plant had become obsolete or inappropriate in relation to exploitation of new sub-cultures of high yielding strains supplied by Meiji. apex court held that expenditure incurred is revenue expenditure and not capital expenditure. apex court in Bikaner Gypsums Ltd. v. CIT [1991] 187 ITR 39, held where assessee has existing right to carry on business, any expenditure made by it during course of business for purpose of removal of any restriction or obstruction or disability would be on revenue account, provided expenditure does not acquire any capital asset. This court in Steel Complex Ltd. s case [1999] 238 ITR 1054 (Ker) upheld view of Tribunal that installation of water treatment plant for getting pure water was with intention to improve functioning of factory and that did not in any way enhance production of steel and that fume extraction plant also did not lead to any increase in volume of production and was installed to ward off health hazards and in compliance with statutory requirements. Division Bench held applying principles laid down by Supreme Court in Alembic Chemical Works Co. s case [1989] 177 ITR 377 that expenditure incurred on installation of water treatment plant and fume extraction plant is revenue expenditure. facts we get in instant case are entirely different. facts of this case would show that water treatment plant was installed in compliance with statutory requirements and is of permanent nature. We hold that ratio laid down by Division Bench in Steel Complex Ltd. s case [1999] 238 ITR 1054 (Ker) cannot be of universal application and each case has to be decided on facts and circumstances of that case. We are of view that Commissioner as well as Tribunal has committed error in following decision in Steel Complex Ltd. s case [1999] 238 ITR 1054 (Ker) in instant case. We are of view, when water treatment plant is installed permanently in compliance with statutory requirement same would attain character of capital expenditure. Installation of water treatment plant of permanent nature has come into existence with enduring advantage to assessee. Water treatment plant is chargeable asset installed to prevent pollution. question as to whether by installation of this plant, production of centrifuged latex has been increased or not is immaterial. Failure to comply with statutory requirements of installation of water treatment plant would lead to closure of requirements of installation of water treatment plant would lead to closure of factory and hence there is no question of any increase in manufacture or production in plant. water treatment plant installed by assessee consists of various chambers namely equalisation tank, primary settling tank, mixing channel, aeration tank, secondary settling tank and drying bed. plant installed is permanent tangible asset of enduring advantage to assessee, of free pollution free atmosphere and environment. benefit/advantage derived by assessee is not only for year under consideration but for all succeeding assessment years. Expenditure spent for its operating and maintenance costs may be revenue, but expenditure spent for installation of plant which is of enduring nature is always capital. We therefore allow this appeal and restore order of assessing authority and hold that expenditure incurred by assessee for installing water treatment plant is capital expenditure and not revenue expenditure and we find ourselves unable to agree with reasoning of Division Bench in Steel Complex Ltd. s case [1999] 238 ITR 1054 (Ker), which in our view cannot be of universal application and is confined to facts of that case. *** COMMISSIONER OF INCOME TAX v. GLEN VIEW RUBBER CO. (P) LTD.