TaxTMI 
TaxTMI 
2011 (12) TMI 293
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....ctively. 3. The assessee is a Public Limited Company engaged in the manufacture of clothes, industrial fabrics, readymade garments, sewing threads etc. They have filed income tax returns for the assessment years 1994-95, 1995-96 and 1996-97. 4. The assessing officer, for the assessment years 1994-95 and 1995-96, inter alia disallowed the claim of the assessee in respect of replacement expenditure of Auto Coners etc. by holding that replacement of old by new machinery cannot be treated as revenue expenditure. The Assessing Officer also disallowed the claim of the assessee with respect to repairs to rented premises, for the assessment years 1994-95, 1995-96 and 1996-1997, by holding that the said expenditure represents capital expenditu....
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....nt complete machinery can be treated as revenue expenditure? 3. Whether on the facts and in the circumstances of the case, the Tribunal was right in deciding the issue without going into the concept of Block of asset? 4. Whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the expenditure incurred on repairs of the rented building as a deductible expense under Section 37(1) of the Act, ignoring the provisions of explanation 1 to Section 32 of the Act?" 9. We have gone through the entire materials placed on record. It is seen from the perusal of the records that the Revenue has filed appeals before the Income Tax Appellate Tribunal in I.T.A.Nos.105(Mds)/2002, 1140 (Mds....
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.... was revenue in nature and it had to be allowed in its entirety. Aggrieved by the said order, the revenue has filed the aforesaid tax case appeals. 11. When the tax case appeals came up for consideration, it is submitted by the learned counsel for the Appellant/Revenue that with regard to the substantial questions of law 1 and 2 they are covered as per the judgment of this Court, dated 25.04.2011 in Tax Case (Appeal) Nos.71 and 72 of 2008. 12. In view of the above, following the same, the substantial questions of law 1 and 2 raised in this tax case appeal are answered against the assessee and in favour of the revenue. 13. With regard to the third substantial question of law, it is submitted by the learned counsel for the appellant ....
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....he fourth substantial question of law, viz., whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the expenditure incurred on repairs of the rented building as a deductible expense under Section 37(1) of the Act, ignoring the provisions of explanation 1 to Section 32 of the Act, it is submitted by the learned counsel for the appellant that Section 37(1) of the Income Tax Act permits deduction of only such expenses not being capital expenditure of the nature prescribed under Sections 30 to 36. It is also submitted that when the major repairs in the nature of capital expenditure is carried out, it cannot be treated as deductible under Section 37(1) of the Income Tax Act, merely because the premises is ....
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....9. Section 37(1) of the Income Tax Act contemplates that any expenditure, which is not being expenditure of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee, laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head 'Profits and gains of business or profession. 20. Further, in similar circumstances, this Court, after following the decision of the Honourable Apex Court in CIT v. Saravana Spg. Mills Ltd. [2007] 293 ITR 201/163 Taxman 201, as per judgment dated 08.11.2011 made in T.C.A.No.39 of 2008, reported in 2011 Current Indian Judgements 482 Madras (The Comm....