TMI Blog2007 (6) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... court was delivered by P. D. DINAKARAN J.—1. The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal dated June 14, 2005, made in I. T. A. Nos. 858, 898 and 899/Mds/2002, for the a years 1996-97, 1994-95 and 1997-98, respectively, raising the following substantial questions of law "1. Whether, on the facts and circumstances of the case, the Tribunal was right in allowing a deduction of the amounts spent on replacement of machinery as revenue expenditure ? 2. Whether, on the facts and circumstances of the case, replacement of independent complete machinery can be treated as revenue expenditure ? 3. Whether, on the facts and circumstances of the case, the Tribunal was right in deciding the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anakiram Mills Ltd . [2005] 275 ITR 403, held that all plant and machinery put together amounts to a complete spinning mill which is capable of manufacturing yarn and hence, each replaced machine could not be considered as an independent one and no intermediate marketable product was produced. 6. In view of the ratio laid down by this court in the decision cited supra, we hold that the expenditure on replacement of machinery is revenue expenditure and, therefore, the Tribunal was right in allowing the claim of the assessee. 7. With regard to the concept of block of assets, this court in CIT v. Janakiram Mills Ltd. [2005] 275 ITR 403, explained the principle or object of introducing the concept of "block of assets" in detail, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore any authorities either by the assessees or by the Revenue to consider the question as block of assets nor was there any necessity to do so. The Department did not raise any objection before the Tribunal regarding the claim of allowance on the premise of the block of assets concept. It is, therefore, stated that such question does not arise out of the order of the Appellate Tribunal for considering the same by this court under section 260A." 8. In the instant case also, the assessee had only replaced certain machinery without discontinuing their production activities and we have already held that there was no acquisition of any new asset, much less capital of any enduring advantage. A perusal of the orders of the authorities below s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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