https://www.taxtmi.com/caselaws?id=16544 Whether expenditure on replacement of major machinery/components in an integrated sugar plant is capital or revenue turned on the character of the plant as a single composite unit. The HC held the tax authorities erred in treating each machine as an independent asset; sugar emerges only after sequential processing through all units, making the machinery an integrated plant. Since the existing plant continued to operate after replacement and no new asset of enduring nature came into existence when viewed vis-a-vis the integrated plant, the outlay was incurred to preserve and maintain the profit-earning apparatus. Relying on the principle that such expenditure may be revenue despite substantial replacement, the Tribunal's view was upheld and the deduction was allowed in favour of the assessee. en-us Wed, 18 Feb 1998 00:00:00 +0530 Tue, 30 Dec 2025 18:39:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=16544 Whether expenditure on replacement of major machinery/components in an integrated sugar plant is capital or revenue turned on the character of the plant as a single composite unit. The HC held the tax authorities erred in treating each machine as an independent asset; sugar emerges only after sequential processing through all units, making the machinery an integrated plant. Since the existing plant continued to operate after replacement and no new asset of enduring nature came into existence when viewed vis-a-vis the integrated plant, the outlay was incurred to preserve and maintain the profit-earning apparatus. Relying on the principle that such expenditure may be revenue despite substantial replacement, the Tribunal's view was upheld and the deduction was allowed in favour of the assessee. Case-Laws Income Tax Wed, 18 Feb 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=16544