|
The Tax Publishers2020 TaxPub(DT) 0411 (Mad-HC) INCOME TAX ACT, 1961
Section 37(1)
Where Total replacement cost of three machineries in question purchased by assessee came to be allowed by Tribunal as 'repairs maintenance expenditure' or 'revenue expenditure', therefore, replacement of machineries as a whole by assessee could not be held to be current repairs or allowable revenue expenditure.
|
Business expenditure - Allowability - Cost of replacement of machineries like Motor Rollers, Spindles, Gears etc -
Issue arose under consideration as to whether Tribunal was right in holding that expenditure on replacement of old machinery by purchase and installation of machinery was allowable as revenue expenditure. Held: Total replacement cost of three machineries in question purchased by assessee came to be allowed by Tribunal as 'repairs maintenance expenditure' or 'revenue expenditure'. The said findings of Tribunal were clearly contrary to Supreme Court decision in Sarangpur Cotton Mfg. Co. Ltd. [[2017] 80 taxmann.com 260 (SC) : 2017 TaxPub(DT) 0908 (SC)] and therefore, view of Tribunal could not be sustained and replacement of machineries as a whole by assessee could not be held to be current repairs or allowable revenue expenditure.
REFERRED : CIT v. Sarangpur Cotton Mfg. Company Ltd. (2017) 80 taxmann.com 260 (SC) : 2017 TaxPub(DT) 0908 (SC) CIT v. Saravana Spinning Mills Pvt. Ltd. (2007) 293 ITR 201 (SC) : (2007) 63 Taxman 201 (SC) : 2007 TaxPub(DT) 1442 (SC) CIT v. Satyadev Chemical Limited (1997) 226 ITR 95 (Guj.) : 1997 TaxPub(DT) 0928 (Guj-HC) CIT v. Baroda Industrial Development Corporation Limited (1992) 198 ITR 716 (Guj.) : (1992) 65 Taxman 359 (Guj.) : 1992 TaxPub(DT) 1222 (Guj-HC)
FAVOUR : Against the assessee
A.Y. :
SUBSCRIBE FOR FULL CONTENT |