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2012 (6) TMI 59 - HC - Income TaxCapital expenditure vs Revenue expenditure - expenditure on account of replacement of moulds and dies - assessee engaged in the manufacture of die-casted components for automotive manufactures having high requirement of modules - Held that:- It has been factually found that the purchase of dies and moulds did not bring into existence any permanent or enduring advantage to the assessee. Due to continuous use they wear out fast and they have to be replaced frequently to ensure quality of the product. Moreover, the moulds have to be produced to suit the requirements of the particular customer and after the order is met, they become useless and ultimately have to be destroyed to prevent misuse. It is well settled that any expenditure on replacement or repairs to plant and machinery which does not bring into existence any enduring or permanent advantage in the capital field is allowable as revenue expenditure. Therefore, dies and tools were allowable as revenue expenditure.
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