TMI Blog2012 (6) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... troyed 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. - ITA No.351/2012, ITA No.352/2012, ITA No.353/2012, ITA No.354/2012, ITA No.355/2012, ITA No.356/2012, ITA No.358/2012, ITA No.360/2012 - - - Dated:- 30-5-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. Sanjeev Rajpal, Sr. Standing Counsel. For Respondents: Ms. Husnal Syali and Mr. Rahul Sateeja, Advocates. R.V. EASWAR, J.: These are eight appeals filed by the Revenue and they re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was also claiming substantial amount of depreciation. According to him the claim of the assessee that the moulds and dies are allowable as revenue expenditure was not bona fide as it had been claimed in addition to the heavy repair expenditure and depreciation relating to the plant and machinery. He observed that the claim for deduction of the expenditure on account of replacement and moulds and dies was not guided by any commercial expediency. In this view of the matter he held that the expenditure brought an enduring advantage to the assessee and therefore disallowed the same as capital in nature. 4. The CIT (Appeals) noted that the assessee was manufacturing the automotive parts since 1986 and since then was consistently following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngevity of the moulds and dies is not substantial as held by the Tribunal 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 or manufacture of fakes. It has also been found by the appellate authorities that the expenditure on replacement of dies and moulds was earlier allowed by the income tax authorities as revenue expenditure. These are factual findings recorded by the Tribunal which are not disputed before us by the revenue on the basis of any evidence or material. It is well settled that any expenditure on replacement or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer was reversed by the CIT (Appeals) holding that the loss can be adjusted in the manner claimed by the assessee. The revenue carried the matter in appeal to the Tribunal which upheld the view taken by the CIT (Appeals). The Tribunal noted that the amendment made to Section 10B(1) of the Act w. e. f. 01.04.2000 was noticed by the CIT (Appeals). It is further noted that the issue was covered by para 20 of the Circular No.7 dated 05.09.2003 issued by the CBDT [(263) ITR (ST.) 77]. In this view of the matter the appeal of the revenue on this point was rejected for both the years. 8. After hearing the learned Standing Counsel for the income tax department, we issue notice to the respondent on this point. Issue notice in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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