1925 (9) TMI 4

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.... of the Indian Income Tax Act of 1922 on the footing that this may be treated as having become in the words of the Act obsolete. It seems to us that this is contrary to the plain meaning of the language used. Obsolete machinery means machinery which though it is able to perform its function has become in common parlance out of date and performs its function so indifferently or at such a cost that a prudent man instead of continuing to use such machinery would discard it and instal more modern and more labour-saving machines. In our opinion, the word obsolete is quite inapplicable to a new car which is only useless for its purposes because it has been broken to pieces in an accident and in our opinion this cannot be allowed as a deduction an....

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....t and reasonable to represent the diminished value by reason of wear and tear during the year of any machinery or appliances used for the purpose of the concern and belonging to the person or company by whom the concern is carried on. Upon that it was held in the case of The Caledonian Railway Co. v. Banks (1) decided in the Court of Exchequer in Scotland that the assessee could not deduct the actual expenses of occasional repairs and renewals and then proceed to claim an additional deduction under the general section of the statute for the same thing under the guise of wear and tear. With that decision no one wishes to quarrel, but it is argued for the assessee that the position under the Indian Statute is quite different because the secti....

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....o say that it is really covered by the general provision of sub-section (vi). It is obviously arguable that most of the repairs in this case can be described as current repairs though of course the matter is one of degree. If a carburetter of a motor-car ceases to function, we should incline to the view that the renewal of the carburetter in order to enable the car to keep the road is properly described as a running repair. On the other hand, if a car as a result of an accident had nothing left but a wheel and everything else had to be renewed, clearly the sensible view would be that the renewal of the car could only be described as an increase of capital. But apart from that, we have the provision of sub-section (2)(ix) which speaks in gen....