2009 (11) TMI 617 - SC - Income Tax

Replacement of machinery - capital or revenue expenditure - whether, on facts and circumstances of this case, the respondent assessee herein was not entitled to deduction in view of the law laid down in the judgement of the Division Bench of this Court in the case of Commissioner of Income Tax vs. Sri Mangayarkarasi Mills Private Limited, 2009 -TMI - 34189 - SUPREME COURT - Matter remanded back for de novo consideration.

Summary

Issues:
- Entitlement to deduction based on a specific court judgment

Analysis:
The Supreme Court heard arguments from both sides and granted leave for final hearing after condoning the delay. The main issue in question was whether the respondent was entitled to a deduction based on the law laid down in a specific court judgment. The petitioner argued that the judgment in question should be interpreted based on the specific facts of each case and not applied universally. The Court refrained from expressing an opinion on this argument and decided to remit the matter back to the High Court for fresh consideration in light of the specific judgment mentioned. The High Court was directed to also consider the tests laid down in other relevant cases while deciding on the merits of the present case. The Court explicitly stated that it was not expressing any opinion on the merits of the case. Finally, the appeal was allowed, and no costs were awarded, subject to the directions provided in the judgment.