2009 (11) TMI 26 - SC - Income Tax

Replacement of machinery Capital Expenditure Versus Revenue Expenditure application of certain judgment held that matter remitted to the High Court for de novo consideration in the light of the judgment in the case of Sri Mangayarkarasi Mills Private Limited 2009 -TMI - 34189 - SUPREME COURT , which has been delivered only on 21st July, 2009. The High Court would also consider the tests laid down by this Court in the cases of Commissioner of Income Tax vs. Saravana Spinning Mills Private Limited reported in 2007 -TMI - 1775 - SUPREME COURT OF INDIA , and Commissioner of Income Tax vs. Ramaraju Surgical Cotton Mills, reported in 2007 -TMI - 2064 - SUPREME COURT OF INDIA , while disposing of this case on merits.

Summary

Issues involved: Whether the respondent was entitled to deduction in view of the law laid down in specific judgments.

Analysis:
- The Supreme Court heard the counsel on both sides, condoned the delay, and granted leave for final hearing.
- The main issue was whether the respondent, the assessee, was entitled to deduction based on the law laid down in the judgment of the Division Bench in a specific case.
- The counsel for the assessee argued that the judgment in question does not apply universally but should be considered in the context of each case.
- The Court did not express any opinion on this argument and remitted the matter to the High Court for fresh consideration in light of the relevant judgment.
- The High Court was directed to also consider the tests laid down in other judgments while deciding the case on its merits.
- The Court clarified that it was not expressing any opinion on the merits of the case.
- The appeal was allowed with no order as to costs.
- The judgment was delivered by two judges, and it was dated November 16, 2009.