1945 (3) TMI 25

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....is a reference made by the Tribunal of Appeal under Section 66(1) of the Income-tax Act. The relevant facts, which are found in the statement of case, are these:- The assessee company started converting the supply of electric energy from D.C. to A.C. system and they were obliged under the provisions of the Indian Electricity Act and under the terms of their licence to change and substitute at t....

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....e to the company and allowed the same. The taxing authorities being dissatisfied with the decision, preferred an appeal to the Tribunal. Before the Tribunal the question whether this expenditure was of capital nature or revenue expenditure was not argued. It was accepted as capital expenditure. The only contention urged before the Tribunal was that, this being capital expenditure, the company had ....

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....ncurred for replacement of fans, radios etc., although it held that the expenditure was of capital nature. It was urged on behalf of the assessees that all this expenditure was for alteration of the system of the company and as depreciation was permitted in respect of the one part of the expenditure it should also be permitted in respect of the other part. In our view this argument overlooks th....

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.... fans, radios etc., are also costs incurred in respect of company's property, because with- out that expense the company's system will not work. It was contended that as the company is allowed to debit to capital expenditure, the cost of repairs or replacement of the pavement when a cable is replaced, and as depreciation is allowed in respect of such expenses, depreciation should be allowe....