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Gopal Mills Co. Ltd. Versus Commissioner of Income-Tax, Bombay North, Kutch and Saurashtra, Ahmedabad

1957 (9) TMI 61 - BOMBAY HIGH COURT

Income-Tax Reference No. 19 of 1957 - Dated:- 23-9-1957 - Tendolkar And S. T. Desai, JJ. For the Assessee : S. P. Mehta with N. A. Palkhivala For the Commissioner : M. P. Amin with G. N. Joshi JUDGMENT Tendolkar, J. The assessee before us is the Gopal Mills Co. Ltd., Ahmedabad, who have owned a textile mill for many years and manufacture textiles therein. The land on which the mills are situated is leasehold and about twenty-five years of the lease had to run during the relevant accounting year. .....

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id water to flow off as overflow from the said pit. Thereafter, some settlement was arrived at between the municipality and the assessee company with a view to make some suitable arrangement for the discharge of the water from the mills and as a result of the settlement, the company filled up the pit during the accounting year and incurred an expense of ₹ 36,454 for filling up the pit. The question that arises for our determination on this reference is whether this amount is an allowable d .....

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pit was allowed to remain unfilled up to a point when it became a nuisance in the locality, filling it up at that stage cannot possibly alter the nature of expense incurred in filling up the pit from a capital expenditure to a revenue expenditure. Secondly, the pit in its existing state before it was filled up was not an asset at all, but it was a liability and a nuisance to the adjoining locality. It was a liability to the assessee. After it was filled up, obviously it became an asset to the as .....

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ount claimed as a revenue reduction was costs of the repairs to the flooring in two departments of a mill. It had been found as affect that the floor used to be made up every year, but in the accounting year it was made up by a new process which rendered the flooring more durable although the expenditure involved was much less than in the past. We held that all that the assessee was doing was to maintain and preserve an asset which is already possessed. Obviously the ratio of that decision is co .....

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