Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (1) TMI 103 - AT - Income TaxCapital expenditure vis-a-vis revenue expenditure - nature of expenditure - replacement cost - assessee has replaced the mechanical yarn clearers with the electronic yarn clearer - Held that:- The replacement has not increased the volume of production of the assessee-company. Strictly speaking, the yarn clearers do not directly take part in deciding the quantum of production. The yarn clearers make the yarn compatible for further treatment. Therefore, yarn clearer is a servicing system within the manufacturing operation carried out by the assessee-company. Therefore, it comes under the category of current repairs, as if a fused bulb is replaced by a new electric bulb. The existing situation is protected and no new benefit is created. Entitlement to be deducted under section 80-IA - captive consumption of power generated - Held that:- Captive consumption of the power generated by the assessee from its own power plant would enable the respondent/ assessee to drive profit and gains by working out the cost of such consumption of power inasmuch as the assessee is able to save to that extent which would certainly be covered by section 80-IA(1). When such will be the outcome out of own consumption of the power generated and gained by the assessee by setting up its own power plant, we do not find any lack of merit in the claim of the respondent/assessee when it claimed by relying upon section 80-IA(1) of the Income-tax Act by way of deduction of the value of such units of power consumed by its own plant by way of profit and gains for the relevant assessment years.
|