INCOME TAX ACT, 1961

Section 37(1)

Capital or revenue expenditure - Expenditure incurred on replacement of jigs and fixtures - -

Assessee claimed deduction of expenditure incurred on replacement of jigs and fixtures. AO held the same to be of capital in nature. Held: Jigs and fixtures were basically toolling aids required in production process and these items were part of the machinery in automobile industry and expenditure incurred on jigs and fixtures at the time of first purchase together with main plant and machinery was duly capitalised by assessee for the purpose of Income Tax Act and depreciation was claimed accordingly. Accordingly, expenditure incurred on replacement of jigs and fixtures was not for bringing into existence a new asset or to obtain a new advantage, and thus qualified to be considered as revenue expenditure.

Followed:CIT v. Sunbeam Auto Ltd. reported in 89 Taxmann.com 191

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 1990-91 to 1994-95

INCOME TAX ACT, 1961

Section 80HHC

SUBSCRIBE FOR FULL CONTENT