1945 (3) TMI 25

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..... me-tax Act. The relevant facts, which are found in the statement of case, are these:- The assessee company started converting the supply of electric energy from D.C. to A.C. system and they were obliged under the provisions of the Indian Electricity Act and under the terms of their licence to change and substitute at their own cost the consumers' equipment such as fans, radios, etc., so as .....

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..... ied with the decision, preferred an appeal to the Tribunal. Before the Tribunal the question whether this expenditure was of capital nature or revenue expenditure was not argued. It was accepted as capital expenditure. The only contention urged before the Tribunal was that, this being capital expenditure, the company had expended the whole money in changing over from D.C. to A.C. system and just a .....

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..... diture was of capital nature. It was urged on behalf of the assessees that all this expenditure was for alteration of the system of the company and as depreciation was permitted in respect of the one part of the expenditure it should also be permitted in respect of the other part. In our view this argument overlooks the express words of Section 10(2)(vi) of the Act. That clause provides for an .....

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..... rty, because with- out that expense the company's system will not work. It was contended that as the company is allowed to debit to capital expenditure, the cost of repairs or replacement of the pavement when a cable is replaced, and as depreciation is allowed in respect of such expenses, depreciation should be allowed also in respect of the cost of replacement in the present case. This argume .....

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..... diture not in respect of the property of the assessees. Therefore the case is not covered by Section 10(2)(vi) and in our opinion the conclusion of the Tribunal is correct. The question referred to us is limited to depreciation and it does not raise the question whether this expenditure is of capital nature or a revenue expenditure. Confining our answer to the question submitted to us, the answer .....

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