2010 (9) TMI 274 - HC - Income Tax

Assessee replaced old air conditioners in their hotel by equal number of new air conditioners under a buy-back scheme - Held that - Capital expenditure - not allowed - If the advantage consists merely in facilitating the assessee s business to be carried on more effectively or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future - matter requires consideration on the grounds raised in appeal

Summary

The High Court of Allahabad heard a case where the assessee replaced old air conditioners in their hotel with new ones under a buy-back scheme. The court admitted the case for consideration on whether this replacement should be treated as capital expenditure. The matter was listed for a hearing after one month.