TMI Blog2013 (7) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (8) TMI 1060 - ITAT CHENNAI]. The co-ordinate Bench of the Tribunal after discussing the facts of the case and the aforesaid decisions of the hon'ble apex court came to the conclusion that the expenditure incurred by the assessee on introducing the compact spinning system is revenue in nature and is thus an allowable expenditure. - Following decision of assessee's own previous case [2012 (1) TMI 103 - ITAT CHENNAI] - Decided against the revenue. - I.T.A. No. 593/Mds/2013 - - - Dated:- 9-7-2013 - Dr. O.K. NARAYANAN SHRI VIKAS AWASTHY, JJ. For the Appellant : Shri P. Peerya, CIT For the Respondent : Shri T. Banusekhar, C.A., ORDER Vikas Awasthy (Judicial Member).- The present appeal has been filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated December 29, 2010, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals)-II, Coimbatore. The Commissioner of Income-tax (Appeals) following the order of the Tribunal in the assessee's own case in Prabhu Spinning Mills P. Ltd. v. Deputy CIT [2012] 19 ITR (Trib) 106 (Chennai), I.T.A. No. 1847/Mds/2011 for the assessment year 2007-08 allowed this ground of appeal of the assessee. Now the Revenue has come in appeal before us assailing the order of the Commissioner of Income-tax (Appeals). 4. Shri P. Peerya, Commissioner of Income-tax representing the Revenue submitted that the Commissioner of Income-tax (Appeals) has erred in allowing the expenditure towards compact spinning system as revenue expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities below as well as the case laws relied on by the representatives of both sides. We find that the issue in hand has already been adjudicated by the co-ordinate Bench of the Tribunal in the assessee's own case for the assessment year 2007-08 in Prabhu Spinning Mills P. Ltd. v. Deputy CIT [2012] 19 ITR (Trib) 106 (Chen- nai), I. T. A. No. 1847/Mds/2011 wherein the Tribunal has discussed in detail the process of compact spinning system to determine the nature of expenditure. The relevant extract of the order of the Tribunal is reproduced hereinbelow (page 113): 11. After cogitating the rival stands in the light of obtaining evi dence/facts/circumstances of the case, we have found that during the year the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rect. We have found that during the year the assessee-company has installed new tech nology gadgets called 'compact spinning system'. The yarn from the stage of simplex is sent through the drafting for spinning by ring frames. The drafting system is situated in the ring frames. The con ventional drafting system is replaced with the latest, state of the art gadget called 'compact spinning'. This is a single piece gadget and this is fixed to each spindles. Each gadgets cost ₹ 4,100 each because the assessee has purchased 37,296 such gadgets in 37 sets (batches) for ₹ 15.39 crores. Thus, it is not a machinery by itself but only an attachment to the existing machine. We have understood that this gadget cannot functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts and the manufacturers of T-shirts need such premium brand products. This change was necessitated to compete in the market and this step of the assessee cannot be taken as a surprise but has to be treated as taken in business exigency. When a question regarding life of these gadgets was put to the learned authorised representative, he stated that each gadget itself consist of many small parts and each part is assembled together to have one single gadget so, they are subject to heavy wear and tear due to continuous running. It was brought to our notice with certitude that these gadgets require constant replacement almost every four years at the maximum. We find that the Tribunal while adjudicating the matter has also taken into consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
