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2012 (7) TMI 18 - MADRAS HIGH COURTMachinery replacement expenditure - revenue or capital expenditure - Held that:- In respect of oxygen analyser it is held that CIT(A) has rightly held that since the whole machinery was not performing well, new machines were installed, they being independent item of machinery. Since replacement had brought about enduring benefit by the installation of new machines, the expenditure was capital in nature - Decided in favor of Revenue. Replacement of SS Shell and other machinery - Held that:- Considering the fact that what was done was only refurnishing of the existing one and packed with refractories, bricks etc, the same is current repairs and allowed as revenue expenditure - Decided against the Revenue. Depreciation on wind mills - dis-allowance on ground that actual commissioning of the windmill took place only after the relevant accounting period - Held that:- Considering the fact that the department itself had not questioned the State Electricity Board's certificate that the wind mill was commissioned during the year under consideration, being a factual finding, question is decided against Revenue. Deduction u/s 80HH - inclusion of profit margin of goods captively consumed - Held that:- Since the items were transferred from one unit to another by the same company, hence, the assessee could not make profit from itself. Therefore, the profit margin element had to be excluded for computing deduction u/s 80HH - Decided against Revenue. Deduction u/s 80HHC - Revenue contended inclusion of conversion charges and sundry sales as forming part of the turnover - Held that:- Conversion charges and the sundry charges did not form part of the turnover for the purpose of deduction u/s 80HH. However, sundry sales being part of the gross total income as profit of the business, the same has to be included in the total turnover for the purpose of deduction u/s 80HHC.
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