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TMI Blog2020 (8) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax, Special Range-43, Mumbai & ld. Dy. Commissioner of Income Tax, Special Range-34, Mumbai respectively (hereinafter referred to as ld. AO). 2. As identical issues are involved in all these appeals, they are taken up and disposed off by this common order for the sake of convenience. With the consent of both the parties, the appeal of the revenue for the A.Y.1990-1991 is taken up as the lead case for adjudication and the decision rendered thereon would apply with equal force for other assessment years also in respect of identical issues except with variance in figures. 3. The first identical issue to be decided in the appeal of the revenue for the A.Y.1990-91 is as to whether the ld. CIT(A) was justified in treating the expenditure on replacement of Jigs and fixtures as revenue expenditure in the facts and circumstances of the case. 3.1. We have heard rival submissions and perused the materials available on record. We find that the assessee company had incurred expenditure on jigs and fixtures amounting to Rs. 1,06,11,064/- including capital work in progress amounting to Rs. 11,18,955/- during the Financial Year 1989-90 relevant to A.Y.1990-91. Assessee su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07. 3.2. We find that the issue in dispute is squarely covered in favour of the assessee of Hon'ble Madras High Court in the case of CIT vs. TVS Motors Ltd., reported in 417 ITR 236. The relevant question before the Hon'ble High Court is as under:- "Whether on the facts and circumstances of the case, the Tribunal was right in holding expenditure on replacement of dies and moulds are to be allowed as current repairs?" 3.3. We find that this issue had been decided in favour of the assessee by the Hon'ble Madras High Court by holding as under:- "4.The revenue does not dispute the fact that in the assessee's own case for the assessment year 2003-04, three substantial questions of law raised in this appeal were considered and they were decided against the revenue and in favour of the assessee in the decision reported in [2014] 364 ITR 0001 (Mad) [Commissioner of Income vs. TVS Motors Limited]. The Substantial Questions of law 1 to 3 herein were identical to that of the Substantial Questions of law 3 to 5 in the said appeal for the assessment year 2003-04. The Substantial Questions of law were answered against the revenue on the following terms: "28. As regards the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature, this Court considered the decisions in the case of CIT Vs. Saravana Spinning Mills P; Ltd., reported in (2007) 293 ITR 201 (SC), CIT Vs. Ramaraju Surgical Cotton Mills reported in (2007) 294 ITR 328 (SC) and CIT Vs. Mangayarkarasi Mills P.Ltd., reported in (2009) 315 ITR 114 (SC) and pointed out that the question as to whether the expenditure incurred on replacement of machinery is revenue or capital rests on the nature of capital incurred vis-a-vis the benefit derived. This Court referred to the decision in the case of CIT Vs. Saravana Spinning Mills P.Ltd., reported in (2007) 293 ITR 201 (SC) and in particular to the decision in the case of CIT Vs. Sri Mangayarkarasi Mills P.Ltd., reported in (2009) 315 ITR 114 (SC) ......... 31. Applying the ratio of the decision cited above, when we look into the facts of the above cases, it is evident that with regard to the moulds and dies attached to the machinery like press designs specification, moulds and dies are not independent of the plant and machinery, but are parts of the machinery. Once the dies are worn out, the machines cannot turn out the product to the business specifications and this has to be obtained only on a repla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would come within the connotation of the phrase "current repairs". Thus, applying these two decisions, we have no hesitation in rejecting the Revenue's appeal. We hold that the claim being considered as current repairs, the same would fall under Section 31 of the Act as current repairs. To that extent, we modify the order of the Tribunal. 33. On the question of deduction under Entry Tax, the Tribunal rightly considered the claim of the assessee for deduction of entry tax payment made by the assessee. The Assessing Officer admitted that the deduction on account of Entry Tax is allowable if the payment is actually made and admittedly, payment of entry tax has been made by the assesssee; the entry tax paid would get the adjustment as against the Sales Tax liability, consequently, any deduction would amount to total deduction." 5.Thus, following the above decision in the assessee's own case, the appeal filed by the revenue is dismissed and the Substantial Questions of law were answered in favour of the respondent/assessee. No costs." 3.4. We also find that similar view has been taken by the Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. reported in 89 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le thereon alone would be eligible for deduction u/s.80HHC of the Act. We also find that the CBDT vide its Circular in Para 32.10 explaining the amendments to the Finance (No.2) Act, 1991 had categorically clarified that the receipts like interest, commission etc., do not have any element of turnover. Accordingly, the amendment was made to remove the said items from the profits of the business w.e.f. 01/04/1992 pertaining to A.Y.1992-93 onwards. Hence, the intention of the legislature is very clear and it is without any ambiguity and it could be safely concluded that the aforesaid four receipts do not form part of total turnover. We also find that the ld. CIT(A) had placed reliance on the decision of the Hon'ble Jurisdictional High Court to support its contention in the case of Kantilal Chhotalal vs. DCIT reported in 246 ITR 439 (Bom) wherein it was held as under:- "The Legislature have clarified that receipts like interest, commission, etc., have no nexus with the export activity and by including such receipts in the business profits the existing formula became unworkable" 4.4. In our considered opinion, this decision is squarely applicable to the assessee for the A.Y.1990-91. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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