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TMI Blog1966 (11) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10(2)(xv) of the Act ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that neither initial depreciation nor development rebate was allowable on the cost of the diesel engine?" The assessee is a private limited company engaged in the business of plying trucks. In the accounting year, it had 23 trucks. In respect of three of these trucks, which were previously running on petrol, the assessee replaced the old petrol engines by new diesel engines which was done at a cost of Rs. 28,027. This expenditure was debited to the profit and loss account and claimed as an admissible deduction in arriving at the income, which according to the profit and loss account was Rs. 1,42,160. The Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as properly attributable not to revenue but to capital. " This has been referred to and followed with approval by their Lordships of the Supreme Court in several cases as a test for determining whether any expenditure is a capital expenditure, or a revenue expenditure. Mr. Srinivasa Rao for the assessee is unable to persuade us that the test is otherwise, though he contends that each case must be determined on the facts and circumstances of that case. While we agree that each case has got to be determined on the facts and circumstances of that case, the test to be applied is clear. What is an advantage of an enduring benefit of a trade is a matter to be determined on the facts and circumstances of each case and we think that in this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of machinery within the meaning of section 10(2)(vib) meant that it should be the installation of a new machinery in replacement of the old one, and that diesel engines cannot be termed as machinery. On the other hand, in the former case, the Madras High Court took a different view, while our own court preferred to follow the view taken by the Bombay High Court in Sri Kantiah v. Commissioner of Income-tax. This matter has been set at rest by the majority judgment of their Lordships of the Supreme Court in Commissioner of Income-tax v. Mir Mohammad Ali where not only diesel engines have been held to be machinery but also that the expression "installations" was held not necessarily to mean machinery fixed in position but would apply even w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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