Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 733 - AT - Income TaxNature of expenditure - expenditure incurred on the cost of Gripper which is used in the robotic arms forming part of high pressure die casting machines - revenue or capital expenditure - HELD THAT:- Hon'ble Supreme Court in the case of Sarvana Spinning Mills Ltd. [2007 (8) TMI 16 - SUPREME COURT] cannot be applicable to the facts of the present case and undisputedly the claim for deduction is not u/s. 31 but u/s. 37 of the Act. Therefore, the finding of the ld. CIT(A) replacement of part of machinery does not fall under current repairs is irrelevant. In the circumstances, the reasoning of the ld. CIT(A) cannot be sustained in the eyes of law. In the present case admittedly the claim for deduction was not u/s. 31 but u/s. 37 of the Act. Therefore, the test to be applied what is replaced is only part and the necessity of replacement had arisen on account of the part become old and there is no increase in productivity or capacity after the replacement. Admittedly, it is not the case of the Revenue that on account of replacement of this part of machinery in productivity or capacity of production had gone up and this machine can independently work and deliver the different output. In the circumstances, we hold that the expenditure can be allowed as revenue deduction. The expenditure incurred on the replacement of Gripper can be allowed as revenue deduction - Decided in favour of assessee.
|