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2015 (3) TMI 848 - MADRAS HIGH COURT

2015 (3) TMI 848 - MADRAS HIGH COURT - [2015] 373 ITR 501 (Mad) - Expenditure on replacement of plant and machinery - Capital v/s revenue expenditure - Tribunal allowing depreciation at 100% on the specified items - Held that:- Depreciation claim on energy saving/Air/Water pollution control equipments was not made while filing return of income, nor while filing details. Suddenly, the assessee company comes in March and claims that this equipments is also eligible for 100% depreciation. The asses .....

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on, after going through the orders of the lower authorities was of the view that the view taken by the CIT (Appeals) is correct on facts. On the issue, as regards item No.4 (1), the lower authorities have given a finding that machinery installed by the assessee are not covered under Item III (3)(B) of the table of depreciation rates. Similarly, as regards the rest of the items, a finding has been given that they are not covered under item III (3)(E) of the said table. Such being the factual scen .....

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evenue expenditure or capital expenditure. Similar issue, it appears, has been considered by this Court in the case of Super Spinning Mills Ltd. - Vs Asst. Commissioner of Income Tax (2013 (9) TMI 88 - MADRAS HIGH COURT), wherein, this Court, following the decision of CIT Vs Sri Mangayarkarasi Mills (2009 (7) TMI 17 - SUPREME COURT ), remanded the matter back to the CIT (Appeals) for consideration and pass detailed orders. - Decided in favour of assessee for statistical purposes. - T.C.A. NO. 11 .....

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ircumstances of the case, the Tribunal was justified in treating the expenditure on replacement of plant and machinery as capital in nature? ii) Whether on the facts and in the circumstances of the case, the Tribunal is correct in not allowing depreciation at 100% on the specified items? 2. The facts, in a nutshell, are as hereunder :- The appellant is in the business of manufacture of automobile components. In respect of replacement of plant and machinery, which is a part of the continuous man .....

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ppeal to the Tribunal, which was dismissed, confirming the order of the CIT (Appeals), against which the present appeal has been filed. 3. Heard the learned counsel appearing for the appellant/assessee and the learned standing counsel appearing for the respondent/Department and perused the materials available on record as also the orders passed by the authorities below. 4. Insofar as the 2nd substantial question of law is concerned, we find that it is mostly in the nature of facts as to whether .....

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ge in march what other proof they could produce to identify such equipments were energy saving equipments and listed in Appendix I of Rule 5. This claim was not made while filing return of income, nor while filing details. Suddenly, the assessee company comes in March and claims that this equipments is also eligible for 100% depreciation. The assessee has no convincing support to sustain its claim. Many of the items are entitled to normal depreciation only, which was claimed and allowed. Hence, .....

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considered the assessing officer's observation as well as the Appendix-I relating to depreciation. I agree with the observation made by the Assessing Officer except for 2 items, viz., Micro Processor based pressure indicating system of ₹ 1,13,624/= and voltage stabilizer ₹ 6,700/-. According to me, first is covered under the Entry III (3) (iii)(B)(c) and the second item is covered under III (3)(iii)(E)(c). I, therefore, direct the assessing officer to allow 100% depreciation to t .....

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e; d) Variable Frequency Drive 4.1 On this issue, as regards item No.4 (1), the lower authorities have given a finding that machinery installed by the assessee are not covered under Item III (3)(B) of the table of depreciation rates. Similarly, as regards the rest of the items, a finding has been given that they are not covered under item III (3)(E) of the said table. 4.2 The learned Departmental Representative submitted that these findings of the lower authorities are on firm footing and have n .....

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rverse. The Supreme Court in Ghisalal Vs - Dhapubai (2011 (2) SCC 298) has held that unless the findings are ex facie perverse, concurrent findings should not be interfered with. The relevant portion of the order is extracted hereunder :- The consideration of this issue deserves to be prefaced with an observation that this Court is extremely loath to interfere with the concurrent finding of fact recorded by the courts below more particularly when such finding has been approved by the High Court. .....

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this Court that no interference would be made with the concurrent finding of fact based on pure appreciation of evidence even if this Court was to take a different view on the evidence. The Court will normally not enter into reappraisal or the review of evidence unless the trial court or the High Court is shown to have committed an error of law or procedure and the conclusions arrived at are perverse. This Court cannot enter into the credibility of the evidence with a view to substitute its opin .....

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s regard reference may be made to the judgments of this Court in Duli Chand v. Delhi Admn., Ramaniklal Gokaldas v. State of Gujarat, Dalbir Kaur v. State of Punjab and Ramanbhai Naranbhai Patel v. State of Gujarat, etc. 9. Keeping the above position of law in mind, even a cursory look at the order passed by the Tribunal would manifestly reveal that the Tribunal, on the issue of depreciation, after going through the orders of the lower authorities was of the view that the view taken by the CIT ( .....

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that the issue should be remanded back to the CIT (Appeals) to consider whether replacement of plant and machinery would be a case of revenue expenditure or capital expenditure. Similar issue, it appears, has been considered by this Court in the case of Super Spinning Mills Ltd. - Vs Asst. Commissioner of Income Tax (2013 (357) ITR 720 (Mad)), wherein, this Court, following the decision of the Supreme Court in CIT Vs Sri Mangayarkarasi Mills (2009 (315) ITR 114 (SC)), remanded the matter back to .....

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