M. A. JABBAR vs COMMISSIONER OF INCOME-TAX, ANDHRA PRADESH,HYDERABAD

The Supreme Court held that the lease money paid by the assessee for the right to remove sand from a river bed was a revenue expenditure, not capital expenditure. The Court emphasized that the nature of the payment and the purpose of the lease were crucial in determining the classification of the expenditure. It was found that the sand was lying loose on the surface, and the lease was for a short period, indicating that the expenditure was related to stock-in-trade rather than acquiring a capital asset. The High Court's reversal of the Appellate Tribunal's finding was deemed erroneous, and the appeal was allowed.