Satish Chandra, J.
1. During the accounting year relevant to the assessment year 1965-66, the assessee spent a sum of Rs. 17,440 for erecting a gate in the Gandhi Garden at Meerut and installing a statue of late Jugmandar Dass Jain, who was the founder-director of the assessee-company. The garden where the statue was installed belonged to the Cantonment Board, Meerut Cantt. The assessee claimed this amount as a deductible revenue expenditure. The ITO repelled the claim which finding was upheld by the AAC as well as by the Tribunal.
2. The assessee claimed that after the erection of the statue the sales had increased continuously. The expenditure in question has been done from a practical businessman's point of view because the expenditure was with a view to increase the profit of the business of the company.
3. The statue was not in the business premises of the company but in a municipal garden. The Tribunal held that it is difficult to hold that persons who have or had business dealing with the assessee would go to the garden to see who the director was. In the next place, it held that there was no evidence on the record that the sale increased because of the erection of the statue in the garden. In the third place, it concluded that even if it is assumed that the erection of the statue was made for the business needs of the assessee, by making the gate in the garden and installing a statue in the garden, the assessee sought to gain an advantage of an enduring nature and when the expenditure is incurred for bringing into existence an advantage of enduring nature such expenditure is certainly referable to expenditure on capital account. It also repelled the contention that the expenditure was allowable under Section 80G of the Act.
4. At the instance of the assessee, the Tribunal referred the following questions of law for our opinion :
'1. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 17,440 could be allowed as a deductible revenue expense on the ground of commerical expediency with reference to advertisement of the assessee-company ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions of Section 80G of the I. T. Act, 1961, were not applicable to donations when the amount had not been paid in cash or by cheque ?'
5. The factual findings mentioned above clearly show that there was really no commercial expediency for incurring this expenditure. The expenditure appears to be more for perpetuating the memory of the founder-director of the assessee. Even if it be assumed that the expenditure led to an enhancement of the goodwill of the company then it was an advantage of an enduring nature which will go to appreciate the capital assets of the assessee. Under the circumstances, this expense could not be held to be on revenue account.
6. Section 80G is also not attracted. Under it the sums allowable as deduction are sums paid by the assessee as donations to a local authority to be utilised for any charitable purpose. The assessee has not paid any sum as donation to a local authority which could be utilised for charitable purposes. At the most it can be said that it made a donation of the statue or a gate to a local authority. Obviously such a thing could not be used for a charitable purpose. This case clearly was outside the purview of Section 80G.
7. Accordingly, we answer the first question in the negative and the second question in the affirmative both against the assessee and in favour of the department. The Commissioner would be entitled to receive costs which we assess at Rs. 200.