9911796707
TMI Blog1986 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The accounting year is the calendar year preceding the relevant assessment year. In respect of the assessment year 1966-67, the assessee claimed deduction of a sum of Rs. 1,44,061 as revenue expenditure. It was its case that the expenditure represented import duties, clearing and forwarding charges as also consulting fees and erection and servicing charges in connection with the installation of blow room lines in the assessee's textile mills and that, therefore it is an expenditure incurred towards current repairs. The Income-tax Officer disallowed this claim on the ground that the machinery was sent for replacing the old machinery by new machinery and the incidental expenses were connected with the same. The Income-tax Officer was furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner upholding the disallowance of Rs. 73,510 on the ground that it represented capital expenditure, while the Department filed cross-objections on the ground that that amount also had to be considered in the assessment year 1966-67 in view of certain proceedings initiated under section 147 by the Income-tax Officer and an ultimate order made in that regard, which we need not notice here. Thus, the entire amount of Rs. 1,44,061 was before the Tribunal for consideration. The Tribunal ultimately accepted the contention of the assessee that the entire expenditure was with reference to the import duty, clearing and forwarding charges and utilisation of spares for modification of the blow room machinery and rectifying it so as to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the satisfaction of the assessee and it is because of that correspondence was going on between the foreign supplier and the assessee. Ultimately, the repairs were effected by replacing certain parts and the expenditure claimed as deduction on the ground that it related to current repairs. On these facts, there could be no doubt that it cannot be treated as a case of replacement of old machinery by new machinery or of acquisition of an asset of an enduring nature to disallow the claim of the assessee. Though the spares were supplied free of cost, the assessee had to incur the other expenditure relating to clearing the same from the customs as also in repairing and servicing the existing machinery while replacing these parts. That clearly is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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