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TMI Blog2007 (6) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... a deduction of the amounts spent on replacement of machinery as revenue expenditure ? 2. Whether, on the facts and circumstances of the case, replacement of independent complete machinery can be treated as revenue expenditure ? 3. Whether, on the facts and circumstances of the case, the Tribunal was right in deciding the issue of replacement of machinery without going into the concept of block of assets ?" 2. The Revenue is the appellant in all the appeals. The claim of the assessees with respect to the expenditure incurred on replacement of machinery as revenue expenditure was disallowed by the Assessing Officer, who treated it as capital expenditure. Against the said order, the assessee filed appeals before the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure and, therefore, the Tribunal was right in allowing the claim of the assessee. 7. With regard to the concept of block of assets, this court in CIT v. Janakiram Mills Ltd. [2005] 275 ITR 403, explained the principle or object of introducing the concept of "block of assets" in detail, in the following words (page 427) "Regarding the argument relating to 'block of assets', it is the claim of learned counsel for the assessees that the said principle or object of introduction of the above concept is totally not applicable relating to the nature of expenditure incurred by the respondent. These provisions were introduced from April 2, 1987, as defined under section 2(11) of the Income-tax Act, 1961, and they are in operation on diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the instant case also, the assessee had only replaced certain machinery without discontinuing their production activities and we have already held that there was no acquisition of any new asset, much less capital of any enduring advantage. A perusal of the orders of the authorities below show that no claim for depreciation was ever made before any authorities by the assessee nor the Revenue raised the question of block of assets. Therefore, applying the law laid down by the decision cited supra, such question does not arise out of the order of the Appellate Tribunal for considering the same by this court under section 260A of the Act. 9. Therefore, finding no substantial questions of law that arise for our consideration in these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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