2008 (10) TMI 333

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.... the respondent. JUDGMENT Te judgment of the court was delivered by 1. MRS. PRABHA SRIDEVAN J.- The following two substantial questions of are raised in this tax case: "(i) Whether, on the facts and in the circumstances of the case, the Income-tax Tribunal is right in law in holding that disallowance under section 43B on the contributions towards gratuity fund after the close of the pr....

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....ment cost of the machinery as a revenue expenditure. 3. On the question of replacement of the machinery, the Commissioner of Income-tax held that it was not capital expenditure and therefore, to be allowed as revenue expenditure and the disallowance of payment towards gratuity fund was deleted. Aggrieved by the same, the Department filed appeal, which was dismissed. 4. The first question is ....

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....g whether the expenditure was revenue or capital in nature. A number of judgments have been cited before us in that regard. However, in the absence of the requisite details regarding the production capacity remaining constant even after replacement, the matter needs to be remitted to the Commissioner (Appeals). There is one more reason why we are inclined to remit the matter. As stated above, the ....

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....ntage of an enduring nature and therefore the expenditure was capital in nature. However, according to learned counsel for the assessee the said test propounded on behalf of the Department is no more applicable. We express no opinion on the aforestated contentions at this stage. It is for the Commissioner to decide the aforestated questions and contentions raised by the Department as well as by th....