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TMI Blog2011 (10) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out that the question of admissibility of deduction under Section 80 HHC, is involved in all these matters. While additional question of nature of expenditure on repairs of transformers, falls for consideration in Income Tax Appeal No.101/2010, which is for the assessment year 2004-05. 2. In this background we have heard Shri Anand Parchure, learned Counsel for the appellant and Shri C.J. Thakkar, learned Counsel for respondent in all the appeals finally. 3. Shri Parchure, learned Counsel for department has contended that the transformer was virtually rebuilt and hence expenses of Rs. 1,80,85,276/- could not have been treated as on current repairs. He has contended that this expenditure is too high to accept it as revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of its existing capabilities and not a case of acquisition of new asset or obtaining any advantage of enduring nature, which is certainly a different aspect than mere repairs/restoration of capacity. It is to be noted that all these findings are basically finding of fact. 7. Shri Parchure, learned Counsel had relied upon the judgment of Hon'ble Apex Court reported at (2009) 182 TAXMAN 141 (SC) (Commissioner of Income Tax. vrs. Sri Mangayarkarasi Mills (P) Ltd.). There the assessee was engaged in manufacture and sale of Cotton Yarn and expenditure incurred on replacement of machinery was claimed as revenue expenditure. A.O. has disallowed that claim and he treated it as capital in nature. Even in books of account the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CTR (SC) 139 (Ajanta Pharma Ltd. vrs. Commissioner of Income Tax) and urged that issue is squarely covered in his favour because of this judgment. 11. We have perused the said judgment. The Hon'ble Apex Court has stated that Section 115 JB is a selfcontained code and it takes deemed income by referring to "book profit". Book profits are to be computed by making deductions as prescribed in clause [a] to [f] of explanation appearing in subsection [2] and by reducing the income as per various heads, as stipulated in clause (i) to (iii) thereof. The provisions of Section 80 HHC are held to operate in different sphere. The Hon'ble Apex Court has noted essential conditions for invoking Section 80 HHC (1) and found that same were conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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