TMI Blog2015 (10) TMI 2438X X X X Extracts X X X X X X X X Extracts X X X X ..... y which was replaced by a high memory variety. Thus, totally new equipment has been added under the guise of replacement. On a specific query it was admitted by the ld. AR on behalf of the Assessee that the actual cost of the total equipment including the lathe in 2001 was ₹ 53 lacs whereas the replacement of the controller alone in 2007-08 is at a cost of ₹ 35 lacs. The Assessee in its written submission has also categorically admitted that the said replacement was due to technological advancement and for increasing the efficiency. Thus, it becomes clear that the said lathe by this replacement has become more efficient thereby resulting in increase in the capacity and getting extended life. This is nothing but in the capital fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of the fact that the said expenditure resulted in an enduring benefit in respect of the said machinery and as the expenditure was incurred on the capital field, the AO had held the said expenditure to be a capital expenditure. It was the submission that on appeal, the ld. CIT(A) had directed that the expenditure was liable to be treated as a Revenue expenditure and that it qualified as current repairs. It was the submission that the order of the ld. CIT(A) was liable to be reversed insofar as the expenditure incurred by the Assessee was on the capital field. 3. In reply, the ld. AR submitted that in 2001 the Assessee company had installed an advanced CNC lathe and milling machine alongwith other support machinery. During the year u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid machine was low memory variety which was replaced by a high memory variety. Thus, totally new equipment has been added under the guise of replacement. On a specific query it was admitted by the ld. AR on behalf of the Assessee that the actual cost of the total equipment including the lathe in 2001 was ₹ 53 lacs whereas the replacement of the controller alone in 2007-08 is at a cost of ₹ 35 lacs. The Assessee in its written submission has also categorically admitted that the said replacement was due to technological advancement and for increasing the efficiency. Thus, it becomes clear that the said lathe by this replacement has become more efficient thereby resulting in increase in the capacity and getting extended life. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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