TMI Blog1978 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred in the transporting of its own sugarcane from farm to factory ? 2. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 1,27,687 incurred in installing the data processing machine is allowable as a revenue expenditure for the assessment year 1969-70 ? 3. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 2,46,000 incurred by the assessee for reconditioning of generator is allowable as a revenue expenditure for the assessment year 1969-70 ? 4. Whether, on the facts and in the circumstances of the case, the bonus payment of Rs. 9,890 for the assessment year 1969-70 and Rs. 4,950 for the assessment year 1970-71 made by the assessee to its employees is allowable as an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack the machine supplied at any time with prior notice of three months. The supplier would also be entitled to take back the machine under the agreement after the expiry of one year from the date of installation. Therefore, on the facts, it cannot be said that the benefit or advantage derived by the assessee in installing the processing machine confers any enduring benefit or advantage to it. Merely for the reason that the installation charges came to Rs. 1,27,687 it does not become a capital expenditure. The expenditure for installation charges was incurred on an asset which did not belong to the assessee. The amount expended is no doubt a big sum but the nature of the machine has also to be taken into account and it is not the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be commissioned. The plant, it is not in dispute, costs some crores of rupees. Therefore, an expenditure of Rs. 2,46,000 incurred for replacement of certain parts cannot be said to be an expenditure for the creation of a new asset and that too of an enduring nature so as to disentitle the assessee from claiming deduction. The decision of this court in Guntur Merchants Cotton Press Co. Ltd. v. ITO [1977] 108 ITR 620 (AP) covers the question raised by the revenue. This question, therefore, is answered in the affirmative and in favour of the assessee. So far as the fourth question is concerned, Mr. Swamy, learned counsel appearing for the assessee, concedes the case of the revenue in so far as the two assessment years in question are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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