9911796707
TMI Blog1993 (10) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,87,014 incurred by the assessee in the assessment years 1979-80 and 1980-81, respectively, in connection with the modernisation of the factory is allowable as revenue expenditure ? For the assessment year 1980-81 only : Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the assessee is entitled to claim deduction towards bonus paid in excess of the statutory bonus ?" The assessee had a spinning mill. The assessee claimed deduction as revenue expenditure of Rs. 3,51, 852 and Rs. 6,87,014, respectively, for the assessment years 1979-80 and 1980-81. The Income-tax Officer rejected the claim holding that the expenditure is in the nature of capital expenditure. Of course, he has said that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sider first question No. 1. It is clear from the statement of facts and from the order of the Tribunal that the expenditure incurred by the assessee was on renovating and replacing the old and worn out parts of the machinery. The Tribunal found that the need for modernisation of the machinery was imperative for the business to run smoothly and effectively. As we said earlier, the Tribunal relied on its own decision in the case of Madras Spinners Ltd. Madras Spinners' case is the subject-matter of Income-tax Reference No. 168 of 1986. (CIT v. Madras Spinners Ltd. [1994] 207 ITR 35). In this income-tax reference, at the instance of the Revenue, the questions referred are almost identical. We heard the case along with a batch of cases relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pulleys of 23 frames. The nature of expenditure incurred in these two cases which is the subject matter of the question of law referred is in no way different from the nature of expenditure incurred in the cases we have decided of the assessee in Income-tax References Nos. 105 and 106 of 1989, etc. We are of the opinion that we are fully justified in relying on the decisions we have rendered in Income-tax References Nos. 105 and 106 of 1989, etc., holding that the expenditure incurred in these two cases is not in the nature of capital expenditure but only revenue expenditure. We are appending a copy of our judgment in Income-tax References Nos. 105 and 106 of 1989, etc., along with this judgment. In the result, we answer the first question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct as to whether the bonus paid by the assessee may stand the test specified in section 36(1)(ii) of the Income-tax Act read along with the proviso has not been adjudicated by the Tribunal. In these circumstances, we decline to answer the question. We direct the Tribunal to consider the matter afresh in the light of the decisions in CIT v. Kerala Agro Industries Corporation [1990] 183 ITR 197 (Ker), CIT v. P. Alikunju, M. A. Nazir, Cashew Industries [1987] 166 ITR 611 (Ker) and Income-tax Reference No. 185 of 1985 (CIT v. P. Balakrishna Pillai, International Cashew Traders [1990] 182 ITR 449) and Income-tax Reference No. 399 of 1985 (CIT v. Kumar Industries [1990] 183 ITR 156 (Ker)). References are disposed of as above. A copy of this jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
