1978 (12) TMI 60

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..... ual deriving income from business in running a printing press which started for the first time during the previous year ended 31st March, 1973 relevant for the asst. yr. 1974-75. The only ground in the appeal relates to the allowance for a sum of Rs. 14,543 spent by the assessee on the purchase of type used in his printing press. The assessee claimed that the types were subject to rapid wear and t .....

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..... apital expenses and so he confirmed the disallowance. 3. Sri D.C. Roy, the learned representative for the assessee, urged before us that the authorities below were not justified in their decision. He fairly pointed out that decision in the case of Jansatta Karyalaya vs. CIT Gujarat(1), has decided a similar issue against the assessee. However, he invited our attention to the decision in the case .....

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..... a, the learned representative for the Department, on the other hand, supported the orders of the authorities below. He stated that the expenditure under consideration was incurred in connection with the setting up of the profit-earning machinery because they were purchased right at the commencement of the business. He urged that the expenditure, therefore, was obviously incurred on capital account .....

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..... her the aforesaid test was satisfied in the present case in order to justify the claim of the assessee. The case of Carlton Hotel (P) Ltd(3). Was concerned with a case of business which had already started several years ago. That was not a case of the very first year of starting the business and so the principle therein cannot be applied to the facts of the instant case. On the contrary; the case, .....

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..... resaid, then the ITO should allow the replacement expenses. Otherwise, he would be justified in treating this expenditure as capital expenditure. For this purpose, we set aside the reassessment of the ITO and direct him to do the assessment afresh in accordance with law after giving a reasonable opportunity of being heard. 6. In the result, the appeal may be treated as allowed for statistical pu .....

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