THE COMMISSIONER OF INCOME-TAX, MADRAS vs K. T. M. T. M. ABDUL KAYOOM

The Supreme Court held that the lease money paid by the assessee firm for gathering conch shells from the sea was capital expenditure under Section 10(2)(xy) of the Income Tax Act, 1922, and thus not deductible from business profits. The Court reasoned that the expenditure was for acquiring an enduring asset, namely, an exclusive right to fish, rather than for obtaining stock in trade. The majority opinion distinguished the case from Mohanlal Hargovind v. Commissioner of Income-tax, while dissenting Justice Das argued it was a deductible expense as it pertained to stock-in-trade acquisition.