Dr. B.P Saraf, J.:— By this reference under section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question of law to this court for opinion:

“Whether, on the facts and in the circumstances of the case, the asset, viz., the approach road to the premises of the research and development laboratories, was expenditure of a capital nature on scientific research related to the business carried on by it within the meaning of section 35(1)(iv) of the Income-tax Act, 1961?”

2. The assessee is a company. The business of the assessee is that of manufacturing pharmaceutical dye-stuffs and pesticides. In its return of income under the Income-tax Act, 1961 (“the Act”), for the assessment year 1975–76, the assessee claimed deduction under section 35(1)(iv) of the Act of a sum of Rs. 26,984 expended by it on the construction of approach road to the premises of its research and development laboratories. This claim was disallowed by the Income-tax Officer. The assessee appealed to the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) also rejected the claim of the assessee and upheld the order of the Income-tax Officer on the ground that the approach road was not exclusively used for research purposes. Against the order of the Commissioner of Income-tax (Appeals), the assessee appealed to the Income-tax Appellate Tribunal. The Tribunal, however, accepted the contention of the assessee that the road in question being an approach road to the research and development laboratories of the assessee, the expenditure incurred on the construction thereof was expenditure on scientific research within the meaning of section 35(1)(iv) of the Act. The Tribunal, therefore, allowed the appeal of the assessee and set aside the orders of the Income-tax Officer and the Commissioner of Income-tax (Appeals) in this regard. Hence this reference under section 256(1) of the Act at the instance of the Revenue. The controversy before us is whether expenditure on construction of the approach road to the premises of the research laboratories of the assessee is expenditure on scientific research eligible for deduction under section 35(1)(iv) of the Act. Section 35 grants deductions in respect of expenditure incurred on scientific research specified in clauses (i) to (iv) of sub-section (1) thereof. Section 35, as it stood at the material time, so far as relevant, reads:

“35. Expenditure on scientific research.—(1) In respect of expenditure on scientific research, the following deductions shall be allowed—

(i) any expenditure (not being in the nature of capital expenditure) laid out or expended on scientific research related to the business;

Explanation.— …

(b) any sum paid to a scientific research association which has as its object the undertaking of scientific research or to a university, college or other institution to be used for scientific research:

Provided that such association, university, college or institution is for the time being approved for the purposes of this clause by the prescribed authority;

(iii) any sum paid to a university, college or other institution to be used for research in social science or statistical research related to the class of business carried on, being a university, college or institution which is for the time being approved for the purposes of this clause by the prescribed authority;

(iv) in respect of any expenditure of a capital nature on scientific research related to the business carried on by the assessee, such deduction as may be admissible under the provisions of sub-section (2).

(2) For the purposes of clause (iv) of sub-section (1),—….

(ia) in a case where such capital expenditure is incurred after the 31st day of March, 1967, the whole of such capital expenditure incurred in any previous year shall be deducted for that previous year.

Explanation.—. …”

3. From a perusal of the above provision, it is clear that deduction under this section is not confined to revenue expenditure on scientific research. Any capital expenditure incurred by the assessee on scientific research related to his business is also allowable as a deduction by virtue of section 35(1)(iv). It is not disputed by the Revenue that expenditure on construction of the approach road to the research laboratories of the assessee is an expenditure of capital nature. The only controversy is whether it is an expenditure on scientific research related to the business carried on by the assessee. The assessee claims it to be so. According to him, without construction of the road, there would be no easy access to the research and development laboratory. The Income-tax Officer rejected this contention on the ground that this expenditure was not directly related to research. It was only incidental. The Appellate Assistant Commissioner upheld the disallowance on the ground that the road in question was not used exclusively for research purposes. The above findings of the Income-tax Officer and the Appellate Assistant Commissioner did not find favour with the Tribunal. The Tribunal accepted the contention of the assessee that the road in question being an approach road to the research and development laboratories, it was an expenditure of capital nature on scientific research within the meaning of clause (iv) of section 35(1) of the Act and held that the assessee was entitled to deduction under section 35(1) in respect thereof. It is this finding of the Tribunal which is challenged by the Revenue in this reference.

4. Mr. G.S Jetly, learned counsel for the Revenue, submits that the assessee is not entitled to deduction under section 35(1) of the Act as the road in question was not used exclusively for the research laboratory. It can be used for other purposes also. We have considered this submission. We however, do not find any force in it. It is well-settled, that roads as links or providing an approach to the buildings are necessary adjuncts to such buildings and are to be treated at par with such buildings for the purposes of depreciation under section 32 of the Act. (See Cit, Bombay v. M/S Gwalior Rayon Silk Manufacturing Co. Ltd., [1992] 196 ITR 149 (SC)). On the same analogy, the approach road to the research laboratories of the assessee is a necessary adjunct to such research laboratories and expenditure incurred on the construction thereof has to be treated at par with the expenditure on the construction of the research laboratories themselves. In this view of the matter, we have no hesitation in holding that the expenditure of Rs. 26,984 incurred by the assessee on construction of the approach road to its research laboratories is expenditure of a capital nature on scientific research related to the business carried on by the assessee and deduction is allowable in respect thereof under section 35(1)(iv) of the Act.

5. We also do not find any merit in the alternate submission of counsel for the Revenue that, even if the approach road is held to be at par with buildings, no deduction can be allowed in this case under section 35(1)(iv) as the road in question is also susceptible to use for other purposes. There is no dispute in this case that the road in question is an approach road to the research laboratories of the assessee. It is, therefore, at par with the buildings of the research laboratories and expenditure incurred thereon is eligible for deduction under section 35(1)(iv). The main purpose of this expenditure being to provide an approach road to the research laboratories, the fact that it may be used for other purposes also is not material. As observed by the House of Lords in Usher's Wiltshire Brewery Ltd. v. Bruce, [1914] 6 TC 399, where the whole and exclusive purpose of the expenditure is for the purposes of the expender's trade, and the object which the expenditure serves is the same, the mere fact that, to some extent, the expenditure enures to a third party's benefit cannot in law defeat the effect of the finding as to the whole and exclusive purpose. If the expenditure is incurred for the purpose of scientific research related to the business of the assessee, it does not matter that the expenditure may result in some other benefit to the assessee or enure to the benefit of a third party. In the instant case, the road has been constructed by the assessee with the sole object of providing an approach road to its research laboratories. This fulfils the requirements of section 35(1)(iv). It is immaterial that the same might also be used as an approach road to some other buildings of the assessee.

6. In view of the above, we are of the clear opinion that the expenditure in the instant case is an expenditure which falls within clause (iv) of section 35(1) of the Act and the assessee is entitled to deduction under section 35(1) in respect thereof.

7. Our attention was also drawn by counsel for the Revenue to the proviso to clause (ia) of sub-section (2) of section 35 of the Act which was added by the Finance Act, 1984, with effect from April 1, 1984. It reads:

“Provided that no deduction shall be admissible under this clause in respect of any expenditure incurred on the acquisition of any land, whether the land is acquired as such or as part of any property, after the 29th day of Februray, 1984.”

8. We do not think that this proviso can in any way help the Revenue in this case. This proviso, on the other hand, makes it clear that, prior to its incorporation even expenditure incurred on acquisition of land was an allowable deduction under section 35(1)(iv) of the Act. In view of the foregoing discussion, we are of the clear opinion that the expenditure incurred by the assessee on construction of the approach road to its research and development laboratories is an expenditure of capital nature on scientific research related to the business of the assessee within the meaning of clause (iv) of section 35(1) of the Act, and the assessee is entitled to deduction under section 35 of the Act in respect thereof. The question referred to us is, therefore, answered in the affirmative, i.e, in favour of the assessee and against the Revenue.

9. No order as to costs.