TMI Blog1970 (11) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 57-58 and 1958-59. The company uses certain calendering machines. Certain parts of calendering machines are known as cotton bowls. During the previous year relating to the first assessment year the company spent Rs. 36,186 for purchase of new cotton bowls. During the second year 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achine was purchased in the year 1924 at a cost of Rs. 32,500. Seven bowls were replaced in five instalments between September, 1945, and July, 1956. The cost of replacement of bowls varied between Rs. 3,255 and Rs. 11,363. The report contains similar details about the cost and time 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 fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey which has to be spent after the machine has to be run for a number of years. In the case of L. H. Sugar Factories, the assessee owning a sugar factory and oil mill business claimed that the expenditure incurred by it in the re-roofing of labourers' quarters by using new khaprails in place 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. Mahalaks ..... X X X X Extracts X X X X X X X X Extracts X X X X
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