TaxTMI 
TaxTMI 
1979 (2) TMI 88
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....the I.T. Act, 1961, at the instance of the revenue is as follows : " Whether, on the facts and in the circumstances of the case, the assessee is entitled to get depreciation and development rebate on the sum of Rs. 75,760 paid for acquiring the right to install and operate additional spindles ? " The spindle capacity of a textile mill is restricted by the Central Government and permission of the....
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.... in the appeal that the assessee might be entitled to add Rs. 75,760 to the cost of spindles for claiming depreciation allowance in the year in which the new spindles were installed. However, when the assessee made such a claim in the assessment year 1967-68, both the ITO and the AAC took the view that the sum of Rs. 75,760 could not form part of the cost of acquisition and installation of spindle....
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....has been challenged. Mr. Joshi appearing on behalf of the revenue has contended that the amount paid for the acquisition of rights to install additional spindles could not be treated as a part of the cost of the spindles. This argument must be negatived in view of the decision of the Supreme Court in the case of Challapalli Sugars Ltd. v. CIT [1975] 98 ITR 167. For the purpose of determining the ....
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.... right to install these additional spindles. This right was acquired by the assessee from the other mill at Nagpur. Unless this right was first acquired the additional spindles could not be installed. It is obvious to us that the price paid to the Nagpur Mill for the acquisition of the right would form a part of the cost of the assets to the assessee. In Challapalli Sugars' case [1975] 98 ITR 167 ....