1964 (8) TMI 75

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....22, in respect of the cost of certain spindles purchased by the assessee-company at Rs. 25,063 and Rs. 67,980 respectively in the two account years. The assessee-company carried on at all material times the business of manufacturing and selling cotton textiles. In the two accounting years, namely, calendar years 1957 and 1958, the company replaced ordinary spindles by roller bearing spindles at the cost of Rs. 25,063 and Rs. 67,980 respectively and debited these amounts to the machinery repairs account. The company claimed that the expenses incurred on these spindles having been held to be of a capital nature in the previous years, it was entitled to development rebate under section 10(2)(vib). Both the Income-tax Officer and the Assista....

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....d Ali#, which was taken in appeal before the Supreme Court by the Commissioner of Income-tax, Madras, against the aforesaid decision of the Madras High Court. In that case, the respondent was a bus owner and transport operator at Vellore, and was possessed of a fleet of buses. During the relevant year he replaced petrol engines in two of his buses by new diesel engines at a cost of Rs. 18,544. Before the Income-tax Officer, apart from claiming the normal depreciation under the first paragraph of clause (vi) of section 10(2), he also claimed depreciation under the second paragraph of clause (vi) and clause (via). The Income-tax Officer, however, only allowed twenty-five per cent. depreciation under the first paragraph of clause (vi). In appe....

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....surance or for repairs or in respect of normal depreciation, or for the purpose of the first paragraph of clause (vi), it was also "machinery" for the purposes of the second paragraph of clause (vi) and clause (via). It further held that the expression "installed" in the second paragraph of clause (vi) and clause (via) did not necessarily mean fixed in position, but was also used in the sense of "induct" or "introduce" or "placing an apparatus in position for service or use" and therefore, when a diesel engine was fixed in a vehicle, it was installed within the meaning of the expression in clauses (vi) and (via) of section 10(2). On this reasoning, the Supreme Court held that the respondent in that appeal was entitled to deduction of the ex....