TaxTMI 
TaxTMI 
1989 (1) TMI 94
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....se three cases. In these original petitions, the Revenue is the petitioner. The same assessee is the respondent in all the cases. The matter relates to the assessment years 1974-75, 1978-79 and 1979-80. The assessee claimed expenditure during the relevant assessment years on modernising its machinery. It was claimed as revenue expenditure. The assessing authority took the view that the expenditure....
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....der section 256(1) of the Income-tax Act, for all the three years. Briefly stated, the question which the Revenue wanted the Tribunal to refer to this court was whether the expenditure incurred by the assessee on modernising its machinery by replacing worn out and unserviceable parts in order to run the business smoothly and efficiently is allowable as a revenue expenditure. The Tribunal declined ....
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.... that the cost of the replaced parts constituted only 20% of the value of the machinery. He has further held that the replacement of the parts which had become unserviceable has not, increased the overall capacity of the machinery though it has improved its working. These findings of the Commissioner of Incometax (Appeals) stand unrebutted. The Income-tax Officer has not given his reasons in detai....
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.... is just to replace old and worn out parts in order to make the unit function effectively. No new machinery or plant was installed and no new asset came into existence. On the facts of this case, and in the light of the findings of the Tribunal, the conclusion is inescapable that the expenditure incurred by the respondent-assessee for modernising its machinery by replacing old, worn out and unserv....