2007 (8) TMI 39

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....pril 29, 2005 in Tax Cases (Ref) Nos. 144, 408, 409 of 1999 and 70 of 2000 etc. in the case of CIT v. Janakiram Mills Ltd.' which also covers the case of the assessee-respondent herein. 2 At the outset it may be stated that vide the judgment dated August 10, 2007, in Civil Appeals Nos. 7604-05, etc. of 2005 in the case of CIT v. Saravana Spinning Mills Pvt. Ltd. this court has set aside the imp....

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....n behalf of the assessee that expenditure incurred on replacement of assets without increase in the production capacity is revenue in nature. However, there is no such ground taken in the memo of appeal filed by the assessee before the Commissioner. 5 There are a number of tests which are required to be considered while deciding whether the expenditure was revenue or capital in nature. A number....

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....te that according to the Department in the present case the assessee was not entitled to claim replacement expenditure as revenue expenditure as it was not incurred to replace an old worn out item of machinery; that on the contrary the old machine has been replaced by a new machine which constitutes an advantage of an enduring nature and therefore the expenditure was capital in nature. However, ac....