9911796707
TMI Blog2006 (1) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of the orders of the authorities below shows that no claim for depreciation was ever made before any authorities by the assessee, nor the Revenue raised the question of block of assets. – revenue appeal dismissed - - - - - Dated:- 21-1-2006 - Judge(s) : P. D. DINAKARAN., P. P. S. JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J.-The above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal in I.T.A. Nos. 1383, 1384 and 1385/Mds/2002 dated June 6, 2005. The Revenue is the appellant. The assessee is a partnership firm. They have filed their returns for the assessment years 1996-97 to 1998-99. Their claim with regard to the cost of replacement of simp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the case, the Tribunal was right in deciding the issue without going into the concept of block of assets?" The question whether the expenditure on replacement of machinery is capital or revenue is not determined by the treatment given in the books of account or in the balance-sheet. The claim has to be determined only by the provisions of the Act and not by the accounting practice of the assessee. In the instant case, the Commissioner and the Appellate Tribunal, finding that replacement of machinery is revenue expenditure, held that the claim of the assessee cannot be disallowed. This court, in CIT v. Janakiram Mills Ltd. [2005] 275 ITR 403, held that all plant and machinery put together amount to a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal depreciation and the profit result from the sale of assets, which were originally considered under sections 32(1)(iii) and 41(2), were suitably amended to fall in line with the proposed simplification of the concept of block of assets. The circular describing the concept of block of assets is explained by the Central Board of Direct Taxes by Circular No. 469 dated September 23, 1986 reported in [1986] 162 ITR (St.) 21, 24. In the instant case, no acquisition of any new asset, much less capital of any enduring advantage resulted to the assessee-respondent. The assessees replaced the worn out part of machineries without discontinuing their production activities. No claim for depreciation was ever made before any authorities either by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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