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TMI Blog2009 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... 005 respectively. For appellant: Mr.K.Ravi For Respondent: Mr.J.Naresh Kumar, Sr.S.C.for Income-tax Dept JUDGMENT (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN, J.) The Tax Case Appeals in T.C.A.Nos.1416 to 1420 of 2009 are filed against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, Chennai, dated 18.9.2009 in I.T.A.Nos.1126, 1127, 1128, 1129 and 1135/Mds/2008 in respect of the assessment years 1996-97, 1999-2000, 2002-2003, 2003-2004 and 2004-2005 respectively by formulating the following questions of law, "1. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in law, in disallowing the claim of expenditure on replacement of machinery as revenue expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e scrutiny assessment was initiated by issuing notice under Section 143(2) on 17.3.2007. The assessment was made vide order under Section 143(3) dated 26.3.1999, wherein machinery replacements to the extent of Rs.6,19,43,673/- was disallowed. In appeal, the Commissioner of Income-tax (Appeals) vide order dated 21.7.2000 allowed the replacement of spindles, High efficiency motors and LT Panel Boards, together amounting to Rs.25,62,018/- as revenue expenditure. The claims pertaining to replacement of ring frame and power house, impeller etc., were remanded to the assessing officer by the Commissioner of Income Tax (Appeals). The claim in respect of these items amounted to Rs.14,04,367/-. These were allowed by the assessing officer vide the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 18.9.2009 had modified its order which was drafted, in the light of the decision of the Supreme Court in the case of MANGAYARKARASI MILLS (P) LTD., and allowed the appeal of the respondent by following the decision of the Supreme Court in the case of MANGAYARKARASI MILLS (P) LTD. reported in 315 ITR 114, holding that the expenses incurred on replacement of machinery is not allowable under Section 37 of the Income Tax Act, 1961 and that the facts of the instant case under consideration were squarely covered by this decision of the Supreme Court. On the issue on allowance of bad debts, the Tribunal had not adjudicated. Aggrieved by the same, the present appeals are filed. 3. We have heard the argument of the learned counsel and perused th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of these assessment years, the assessee claims that the expenditure on replacement of machinery is revenue expenditure in nature under Section 37 of the Income-tax Act. In respect of the said machinery, certain particulars have already been available with the Department. Learned counsel for the assessee submits that the assessee may be given an opportunity to produce additional material in respect of the machienries, which are the subject matter of the above assessment years. When the matter is remitted to the first appellate authority, there is no harm in allowing the assessee to give additional materials about the additional machinery, for which they are claiming benefit under Section 37 of the Income-tax Act. Even in the case of R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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