1998 (9) TMI 57

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..... t the instance of the Revenue is "whether, on the facts and in the circumstances of the case, having regard to the fact that the additions were made to plant and machinery, thus resulting in the addition to cost of capital assets, the Appellate Tribunal was right in law in holding that all the replacement has been done in the worn out machinery and it is a revenue expenditure ? The assessment ye .....

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..... ns of the appellant's spinning mill. While the aggregate outlay on the replacements was in absolute terms not inconsiderable, the replacement did not have the effect of increasing the capacity of the mill, and neither can they be regarded as having resulted in the reconstruction of the whole or substantially the whole, of the production apparatus, for, the expenditure incurred on them was relative .....

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..... usiness. The machineries were not replaced wholly nor new machines were added. The repairs which involved the replacement of some parts does not amount to a fresh investment in capital goods and such expenditure cannot be treated as capital expenditure. The Tribunal, therefore, was right in the view that it took. The question referred to us is, therefore, answered in favour of the assessee a .....

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