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2012 (10) TMI 751 - ITAT CHENNAIRevenue or Capital expenditure – replacement / overhauling / rejuvenation - Assessee is engage in the business of generation of electricity and mining of Lignite – Expenditure incurred towards replacement of various components in boilers and components of BWE under the LEP - Assessee claimed such expenditure as revenue – AO’s view was that this is one time expenditure at the end of life span of the asset with a view to give new life – Held that:- What was replaced was only the parts of machinery and the expenditure was incurred only to preserve and maintain the existing assets and therefore, the expenditure on such repairs is allowable as deduction under current repairs. Following the decision in case of Saravana Spinning Mills P. Ltd. (2007 (8) TMI 16 - SUPREME COURT OF INDIA) that when an expenditure was incurred to preserve and maintain already existing asset and such expenditure is not bringing any new asset into existence or obtaining new advantage such expenditure is allowable as current repairs. Appeal decides in favour of assessee
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