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TMI Blog1970 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to the second assessment year, the company spent Rs. 7,325 for cotton bowls. The company claimed deduction for these two sums under section 10(2)(v) of the Act. The claim was disallowed by the Income-tax Officer on the ground that this expenditure was not for current repairs. This view was upheld in appeal by the Appellate Assistant Commissioner. But, upon further appeal to the Appellate Tribunal, the assessee was able to persuade the Tribunal that both the items were covered by section 10(2)(v) of the Act. At the instance of the Commissioner of Income-tax, U.P., the Appellate Tribunal, Allahabad, has referred the following question, of law to this court : " Whether, on the facts and in the circumstances of the case, the expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchase of other calendering machines and the cost and time of replacement of the bowls relating to those machines. In the light of this information the Tribunal concluded thus: "Taking an overall picture that cotton bowls are required to be replaced very often, as cotton bowls form part of calendering machines and as the bowls come into constant contact with the cloth they are subject to heavy wear and tear and thus get worn out very often. On these facts the amount expended by the assessee on the replacement of the cotton bowls appears to be in the nature of current repairs . . . ." It appears that a cotton bowl constitutes a part of a calendering machine. A cotton bowl is a big iron roller upon which cloth after its manufacture is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace of old ones was revenue expenditure. It was held by this court that the expenditure was neither a revenue expenditure nor expenditure in respect of current repairs. In Kanpur Agencies P. Ltd. v. Commissioner of Income-tax, the assessee put up flush latrines in place of manual latrines, and fixed cement concrete roofs in place of tiled roofs. It was held that these were not repairs, but capital expenditure. In Commissioner of Income-tax v. Mahalakshmi Textile Mills Ltd., the assessee carried on the business of manufacture and sale of cotton yarn. It spent Rs. 93,215 for introduction of the casablanca conversion system in its spinning plant. This involved, replacement of roller stands and rollers fitted with rubber aprons, removal of ri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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