2005 (10) TMI 31

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....he second question, together with the question as to whether the claim of deduction of the amount could be claimed under section 37 of the Act, be considered by the Tribunal. It accordingly, remitted the matter to the Tribunal for fresh disposal of the matter on the aforesaid two questions. The facts of the case may be briefly noticed: The S.T.N. (respondent herein) is a company running a textile mill. We are concerned with the assessment year 1991-1992. The assessee claimed a deduction of a sum of Rs. 11,11,600 which amount it had incurred for replacement of the electric control panel. The Assessing Officer took the view that the said expenditure was in the nature of capital expenditure and therefore, no deduction was allowable under....

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....gh Court, by its order of March 11, 2002 set aside the finding of the appellate authority and the Tribunal to the effect that the expenditure was incurred on "current repairs". In view of this finding, the High Court answered the aforesaid question in favour of the Revenue. However, the matter was again brought up before the High Court under the heading "To be spoken to" and the attention of the High Court was drawn to certain issues, which according to the assessee arose for its consideration. It was submitted that while answering the second question as to whether the expenditure was capital in nature, the High Court was also required to consider whether the expenditure did not answer the description of any expenditure under section 37 of ....

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....of the Revenue. Having perused section 37 of the Act, we are of the view that the High Court has not committed any illegality in remitting the matter to the Tribunal. Section 37 of the Act deals with any expenditure not being an expenditure of the nature described under sections 30 to 36 of the Act, and not being in the nature of capital expenditure or personal expenditure of the assessee, laid down or extended wholly or exclusively for the purpose of the business or profession. Such expenses shall be allowed in computing the income chargeable under the head "Profits and gains of business". In view of the finding of the High Court it cannot be disputed that the expenditure incurred in replacing the electric panel is not an expenditure co....