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TMI Blog2019 (7) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... iven my careful consideration to the facts of the case, the reasons recorded by the AO and submission made by the appellant. From the details submitted by the appellant it is seen that Rotor assembly valued at Rs. 13,294,744 and the Impeller assembly valued at Rs. 25,20,570 are only a part of X-701 and X-103 Turbines respectively. Expenditure on replacement of Rotor assembly has already been treated as revenue expenditure by CIT(A) in the Department. In view of these facts and the decisions quoted by the appellant it is held that the expenditure on replacement of Rotor assembly and Impeller assembly is allowable as a revenue expenditure because it is only for replacement of existing parts of the Turbines and no new asset has come into existence. Similarly, the expenditure on purchase of Gas chromatograph (Rs. 12,44,744/-) and the Relay and control panel board (Rs. 1,32,44,486/-) has been incurred for replacement of existing assets which had become obsolete/got damaged and their replacement was necessary to restore the existing facilities to the original state of efficiency. Replacement does not enhance the capacity of existing facilities. Replacement of control panel has already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being heard to the appellant. But instead of giving clear finding in the order u/s 143(3) r.w.s. 254 of the Act after bringing the materials on record, the AO has given very general findings in such order. Further, in the remand report also the AC has not brought out any material on record to establish that the assertion of the appellant/Chartered Engineer that the parts of the machine are not independent machine but are parts of main Unit was incorrect. The AO during the course of remand proceeding had deputed the Inspectors of his office for identifying the place of fittings of the parts in the Plant and Machinery of the appellant company and to observe its function. The AO in his remand report has discussed the technical aspect of Assembly of Turbine Rotor, Gear Shaft with Gear Part and Nozzle Ring on the basis of report of the Inspectors and has finally stated that these items/parts are not complete equipment but a part of main equipment i.e. Steam Turbine. As per the AO the replacement of these items as carried out due to the breakdown of the Turbine Shaft and repairs of the damaged parts were not possible. As per the AO it was informed to him that with such repairs of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad relied upon decisions of Hon'ble Supreme Court in the case of Sarvana Spinning Mills (TIOL-2007-TIOL-147-SC(I). It is submitted by the appellant that old panel was required to be replaced due to deterioration in insulation material, (Hylem Base) obsoletion of pares and discontinuation of such panel from product range thereby non availability of spare support from OEM. As per the appellant further the panel has also been subject to many flashover in past necessitating replacement of panel. The submission of the appellant as made in its rejoinder to the remand report and which is reproduced in earlier paragraph of this appeal order is found to be tenable. It is stated that my predecessor i.e. earlier CIT(Appeals)- 3, Vadodara in his appeal order in appeal no. CAB(A)-3/271/14-15 dated 05/01/2015 as passed for AY 2003-04 in the case of appellant in connection with the set-aside issue has allowed the expenditure on the Relay and Control Panel Board. The Ld. CIT(A) in this referred order has held that the expenditure on Relay and Control Panel Board has been incurred for replacement of existing assets which had become obsolete/damaged and their replacement was necessary to restore the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estored to A0 it was accepted as revenue expenditure by AO in set-aside proceedings (page 8 of CIT(A) order) and the Authorised Representative (AR) has placed reliance on the decision as relied on by the CIT(A) in para 4.3 of his order. 17. We have considered the facts and perused material available on record and found that the AO has accepted this issue in its set-aside assessment order for A.Y.1999-2000 passed u/s.143(3) read with section 250 of the Act dated 29.12.2009 (paper book, page 630 para 4.5 of the order). Since, the revenue has accepted this issue in the set-aside assessment proceedings, therefore, we do not find any infirmity in the order of CIT(A). Accordingly, this ground of Revenue is dismissed." 10. Since the issue is covered against the revenue by the above order of tribunal. Therefore, following the same issue is dismissed against the revenue. Further, reliance placed in the case of Sri Mangayarkasi Mills (P) Ltd (supra) is not applicable, as in that case replacement of old machinery with new machinery was treated as capital expenditure, whereas, in the instant case, there is replacement of damaged parts of Turbine and machinery, hence, facts are disting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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