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15. There is a clear fallacy in the aforesaid line of argument advanced by the learned counsel for the revenue. The attempt is to cover the payment under Section 32 of the Act and then to assert that it qualifies for depreciation. There from, the learned counsel wants to draw the inference that the payment is capital in nature and not revenue. This kind of "reverse engineering" in our view is not permissible.

16. As per the Scheme of the Act, we have to first determine the nature of expenditure, namely, whether it is of revenue in nature or whether the expenditure is capital in nature or it has the flavor of revenue expenditure To determine this, tests are provided by various judgments of the Apex Court as well as High Courts. That is the precise exercise undertaken by the Tribunal; by referring to the judgments of the Supreme Court, the Bombay High Court and that of Delhi Bench of the Tribunal. Once it is found that the expenditure incurred is the revenue expenditure, and it is incurred during the course and for the purposes of business, same becomes allowable expenditure in its entirety under Section 37 of the Act. The question of depreciation would arise only if it is first determined and established that the expenditure is capital in nature. Once it is capitalized, the question of quantum of depreciation would come in and only then the provisions of Section 32 would come into play, in order to determine, first, whether the expenditure is of the nature which falls within the ambit of Section 32 to be entitled to depreciation and second, the rate at which such deprecation is to be allowed.