An assessee has a factory located in a residential area and was facing irregular power cut imposed on the residential areas, due to which he was suffering huge production losses. The assessee approached the State electricity dept. and paid a huge amt towards installation of a direct power line from the main sub station to his factory. What should be the treatment of this expenditure as it appears to be capital expense but the assessee claims it to be revenue expense as the asset (power line) is owned by the state electricity board?
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