M/S. GOTAN LIME SYNDICATE vs COMMISSIONER OF INCOME-TAX, DELHI AND RAJASTHAN

The Supreme Court held that the yearly royalty payment of Rs. 96,000 made by the appellant for mining limestone is to be treated as revenue expenditure rather than capital expenditure. The Court reasoned that the payment was not for securing an enduring advantage but was directly related to the raw material obtained, as per the Rajasthan Mineral Concession Rules, 1955. The High Court's decision to disallow the deduction was overturned, affirming the appellant's claim for the assessment years 1954-55, 1955-56, and 1956-57.