TaxTMI 
TaxTMI 
2016 (1) TMI 413
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....cumstances of the case and in law, the CIT(A) erred in deleting the addition of Rs. 2,26,90,000/- (net off depreciation) made on account of disallowance of expenditure for replacement of re-membraning cells-II disregarding the decision of the Hon'ble Supreme Court in the case of CIT vs. Saravana Spinning Mills (P) Ltd. (2007) 293 ITR 201 (SC) 2. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. 2. Briefly stated facts of the case are that assessee is a Limited Company engaged in the business of manufacturing and trading of chemicals and generation of power. Return of income was filed on 23.9.2009 declaring total income of Rs. 88,18,01,350/- and thereafter the return of income was revised o....
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.... 5. On the other hand, the ld. AR of the assessee submitted that this issue has been decided in favour of the assessee by the Hon'ble Jurisdictional High Court in assessee's own case in Tax Appeal Nos.798 & 799 of 2010 vide order dated 19/01/2015. 6. We have heard the rival contentions and perused the material on record. Before examining the issue we would like to mention that there seems to be a mistake in the grounds of appeal taken up by the Revenue in relation to amount mentioned. The addition made by Assessing Officer on account of disallowance of revenue of claim on replacement cost of remembraining in membrance cell-II is at Rs. 4,67,13,601/- whereas the amount mentioned by the Revenue in its ground no.1 for the impugned deletion i....
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...., the relevant of which, reads as under:- "An allowance is granted by clause (i) of Section 31 in respect of amount expended on current repairs to machinery, plant or furniture used for the purposes of business, irrespective of whether the assessee is the owner of the assets or has only used them. The expression "current repairs" denotes repairs which are attended to when the need for them arises from the viewpoint of a businessman. The word "repair" involves renewal. However, the words used in Section 31(i) are "current repairs". The object behind Section 31(i) is to preserve and maintain the asset and not to bring in a new asset. In our view, Section 31(i) limits the scope of allowability of expenditure as deduction in respect of repair....
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....umstances, it appears to us that reliance placed upon the decision by the A.O. while making departure from the earlier view taken was erroneous. 9. The Tribunal in the impugned order at paragraph No.11.1 has observed thus:- "11.1. The aforesaid decision has been followed by the Hon'ble jurisdictional High Court in their subsequent decision in Lalludas Children Trust V/s. C.I.T., 251 ITR 50(Guj). Similar view has been taken in the other decisions relied upon on behalf of the assessee as also in several cases including in Arihant Builders Developers & Investors (P) Ltd. v. ITAT (2005) 277 ITR 239 (MP), Asstt. C.I.T. V/s. Gendalal Hazarilal & Co. (2003) 263 ITR 679 (MP), C.I.T. V/s. Neo Poly Pack (P) Ltd. (2000) 245 ITR 492 (Delhi), 4. Dha....
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....amely, any material leading to different conclusion or change in legal position, the consistency on the part of the Revenue should be adhered to. 11. The Tribunal has taken the same view on the part of the consistency of the department. Hence, we find that the same cannot be faulted with. 12. The attempt to contend that life of membrane would be spread over from 3 to 5 years or that the amount involved for replacement of membrane is huge and, therefore, the departure on the part of the Revenue could be said as justified, in our view, cannot be countenance for two reasons. One is that the amount involved would not make difference for chargability of the tax but the nature of expenditure would be relevant for the chargability of tax. It h....