56. To determine as to whether an asset is a `plant’, the Supreme Court in the case of Scientific Engineering House Private Limited (supra) lays down certain tests. These are : “Does the article fulfill the function of a plant in the assessee’s trading activity? Is it a tool of his trade with which he earned on his business? If this answer is in the affirmative, it will be a plant”
5.1 The Act mandates a particular head for each type of income, so that the same has necessarily to be assessed under the said head and in the manner provided under the relevant Chapter. As such, the assessee’s contention of being contractually obliged to bear the said expenditure under the relevant (rent) agreement would be of no moment; the assessee being entitled to claim only the deductions as enumerated u/s. 24 of the Act in the computation of its income assessable u/s. 22.
10B (4) For the purposes of sub-section (1), the profits derived from export of articles or things or computer software shall be the amount which Bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of tljie business carried on by the undertaking.”
Though the taxpayer may have written off the expenditure in its books of account over a period say of five years, it must be allowed in its entirety in the year in which it was incurred, if it is revenue expenditure, and if it is wholly and exclusively incurred for the purposes of business(Para 15)
