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TMI Blog2019 (7) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... s well as affirmed by the Tribunal, it is clear that question (a) raised by the revenue is a pure question of fact and in the absence of any perversity being pointed out in the concurrent findings of fact recorded by the Tribunal, does not give rise to any question of law - R/TAX APPEAL NO. 144 of 2019 - - - Dated:- 8-7-2019 - MR J. B. PARDIWALA AND MR A. C. RAO, JJ. For The Appellant (s) : MR. VARUN K. PATEL (3802) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1.00. This Tax Appeal under section 260(A) of the Income Tax, Act, 1961 (for short the Act, 1961) is at the instance of the revenue and directed against the order passed by the Income-tax Appellate Tribunal in ITA No.2902/Ahd/2016/SRT dated 24/10/2018 for the year 2004-05. 2.00. The revenue has proposed the following questions:- ( a). Whether in the facts and in circumstances of the case, the learned ITAT has erred in law and on facts in deleting addition on account of disallowance of expenses on consumption and replacement of stores and spares of ₹ 1,36,77,278/- after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh 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 part, plant operations could be sustained and there was no increase in capacity of the machines/plant. As per the AO from what was visible, the assembly of Turbine Rotor, Gear Shaft with Gear Part and Nozzle Ring are not independent parts capable of functioning of independently as they form internal par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 existing facilities to the original state of efficiency. Similar is the case of the appellant for the year under consideration. In my opinion, old panel was required to be replaced due to deterioration in insulation material, (Hylem Base) obsoIetion of spares and discontinuation of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 7. We also find that the issue is covered against the Revenue by order of this bench. Since the issue is covered against the revenue by the above order of Tribunal as well as by the Tribunal, Surat Bench in I.T.A. No.1060/Ahd/2015 A.Y.2003-04 dated 27.09.2018. Therefore, following the same we dismissed the appeal of revenue on this ground. Further, reliance placed in the case of Shri Mangayarkasi Mills (P) Ltd (supra) is not applicable, as in that case replacement of old machinery of new machinery was treated as capital expenditure, whereas, in the instant case, there is replacement of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s original state of efficiency so that the entire integrated manufacturing unit which was considered as a profit making apparatus functions efficiently to its capacity and produces quality products. The CIT (Appeals) after perusing the paper book which contains the details like name of the main plant or machinery to which the replaced component pertains, cost of replaced component, cost of total plant and past history of disallowance and appellate decision in past in respect of similar components and the facts which were explained with the help of diagram/process chart showing that replaced component is part of the main plant. The CIT (Appeals), therefore found from the details of additions to that the fixed assets that addition of independent machinery has already been capitalised and claim is made only for depreciation. Thereafter, the CIT (Appeals) on the above facts found that the expenditure claimed as revenue expenditure is in respect of components of the machinery which cannot be treated as the independent machinery in itself as they are not capable of functioning independently. It was further held that the chemical and fertilizer plant was very large plant within which agai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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