2006 (11) TMI 176

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.... The above tax case appeal is directed against the order of the Income-tax Appellate Tribunal in I.T.A. No. 875/Mds/1999 dated December 23, 2005. The Revenue is the appellant. During the previous year relevant to the assessment year 1994-95, the assessee replaced machinery and incurred an expenditure. They claimed the said expenditure as a revenue expenditure and the same was disallowed by the ....

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....acement of machinery is capital or revenue is not determined by the treatment given in the books of account or in the balance-sheet. The claim has to be determined only by the provisions of the Act and not by the accounting practice of the assessee. In the instant case, the Appellate Tribunal, finding that the replacement of machinery is a revenue expenditure, held that the claim of the assessee c....