TMI Blog1979 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... J.--The question referred to the High Court under s. 256(1) of the I.T. Act, 1961, at the instance of the revenue is as follows : " Whether, on the facts and in the circumstances of the case, the assessee is entitled to get depreciation and development rebate on the sum of Rs. 75,760 paid for acquiring the right to install and operate additional spindles ? " The spindle capacity of a textile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a capital expenditure. The AAC, however, made an observation in the appeal that the assessee might be entitled to add Rs. 75,760 to the cost of spindles for claiming depreciation allowance in the year in which the new spindles were installed. However, when the assessee made such a claim in the assessment year 1967-68, both the ITO and the AAC took the view that the sum of Rs. 75,760 could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n referred at the instance of the revenue this view of the Tribunal has been challenged. Mr. Joshi appearing on behalf of the revenue has contended that the amount paid for the acquisition of rights to install additional spindles could not be treated as a part of the cost of the spindles. This argument must be negatived in view of the decision of the Supreme Court in the case of Challapalli Suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capacity by installation of additional spindles unless it acquired the right to install these additional spindles. This right was acquired by the assessee from the other mill at Nagpur. Unless this right was first acquired the additional spindles could not be installed. It is obvious to us that the price paid to the Nagpur Mill for the acquisition of the right would form a part of the cost of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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