TMI Blog2007 (9) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... replacement on one Turbine Rotor amounting to Rs.1,05,44,904/- was on account of current repairs and as such, it was revenue account expenditure?" 2. The facts of the case in brief are as follows:- 3. The respondent assessee is a captive power plant for M/s. Hindustan Aluminium Corporation Ltd. (Hindalco). It is a hundred per cent subsidiary company of Hindalco. During the relevant Assessment Year 1979-80 it had two Thermal Power Plants of generating capacity 67.5 MW each. During the Assessment Year in question, the assessee claimed the revenue expenditure to the extent of Rs.1,05,44,904/- as cost of Turbine Rotor. The said expenditure was disallowed by the Assessing Authority as it was treated as a capital expenditure. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Turbine Rotor is an essential part of Turbo Generator Set. It is not an independent machinery or plant. The Turbine Rotor on its own independent functioning cannot generate electricity. It is being used in the Turbo Generator Set as its an essential part. On these findings recorded by the Tribunal a question arises - whether the expenditure incurred on the change/replacement of Turbine Rotor is a revenue expenditure or capital expenditure. 7. Considered the respective submissions of the learned counsel for the parties. 8. We find that the controversy stands concluded by the judgment of this Court in the case of Commissioner of Income Tax Vs. Kanodia Cold Storage (supra) wherein it has been held as follows:- "Replacement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Machine. So is in the case of the picture tube in a Television Set, when the picture tube is replaced the Television Set is not replaced, therefore, such repairs alone can come within the connotation of the word "current repairs" in Section 31(i) of the said Act as it stood at the material time. They are effected to preserve and maintain the asset, viz. air-conditioner or carding machine."................................................................................................................................................................................................................................. ".............The basic test to find out as to what would constitute current repairs is that the expenditure must have been inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
