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TMI Blog2009 (12) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... .1,66,516 incurred by the assessee for the asstt. year 1976-77 under the head "Repairs to Factory Building Account" was of Revenue nature and not of a capital nature ? 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that by writing back the amount of Rs.1,50,729 in the asstt. Year 1976-77, there was no cessation of liability for payment of gratuity and that this amount was not includible in the taxable income of the assessee for the assessment year 1976-77 ? 3. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the assessee was entitled to claim deduction of bonus on the basis of actual payment as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be claimed in the asstt. Year 1976-77, while the claim for deduction of Rs.44,781 pertained to the asstt. year 1977-78. The assessee, therefore, took up an additional ground before the CIT (Appeals) for the asstt. year 1977-78, wherein it claimed the deduction of Rs.44,781. The CIT (Appeals), however, upheld the disallowance of Rs.1,53,516 on the ground that the expenditure incurred by the assessee could not be treated as "Current Repairs" as contemplated u/s 30(a) (ii) of the Act. He further held that the assessee was not also entitled to the deduction u/s 37(1) of the Act on account of the capital nature of the expenditure. The matter was carried before the Income Tax Appellate Tribunal at the instance of the assessee wherein relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a machinery by a new machinery. It was the case of a spinning mill. In this case, the Supreme Court has observed that each machine in a spinning mill does a different function and the product from one machine is taken and manually fed into another machine and the output is taken, all the machines are, thus, not integrally connected. It may be noted that it was a case of replacement of machine as a whole. In this very case, the Supreme Court has relied upon its earlier judgment in the case of Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd. : JT. (2007) (10) S.C. 111. In the case of Saravana Spinning Mills P. Ltd. (supra), the Apex Court has interpreted the words " Current Repairs". It has been laid down that the basic test ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifficult to hold that there was any cessation of the assessee's liability to pay its liability to its employee through the gratuity fund. It took into consideration the trust deed dated 27.12.1975. The Tribunal has observed in its order that by making entires in the books of account, the assessee has not got any benefit which it had already received deduction in the earlier years for the assessment year 1972-73, it has been noticed in the order of the Tribunal that the assessee had got deduction in respect of the contribution made. It has placed reliance upon a decision of Bombay High Court in the case of Commissioner of Income Tax Vs. Sadabhakti Prakashan Printing Press (P.) Ltd.; 125 ITR 326. No attempt was made before us by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph 40 of its order. The Tribunal has followed the decision of Calcutta High Court in the case of Snow-white Food Products Co. Limited (1982, 29 G.T.R. - Calcutta 3).
The learned standing counsel could not refer any decision either of High Court or of Apex Court wherein a different view might have been taken. In absence of any material otherwise, we find that the view taken by the Tribunal is a reasonable one and calls for no interference.
In view of the above discussions, all the three questions referred to us are decided in affirmative i.e. against the Revenue and in favour of the assessee.
Since none appeared. No order as to costs.
(Prakash Krishna, J.)
(Subhash Chandra Nigam, J.) X X X X Extracts X X X X X X X X Extracts X X X X
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