9911796707
TMI Blog2021 (12) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to the assessment year 2001-02, was admitted by this court on 04.08.2009, on the following substantial question of law:- "Whether on the facts and circumstances of the case, the Tribunal was right in holding that expenditure on replacement of dies and moulds are to be allowed as cur rent repairs? 2. Today, when the matter was taken up for consideration, the learned counsel for the appellant / Revenue as well as the respondent / assessee jointly submitted that the issue involved herein has already been considered and decided by this Court in favour of the assessee by judgment dated 09.01.2014, passed in TCA.Nos.173 and 174 of 2009, the relevant passage of which, is usefully extracted hereunder: "29. As regards the expenditure on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue is concerned, learned counsel appearing for the assessee placed reliance on the decision of this Court reported in (2013) 357 ITR 720 (Mad) in the case of Super Spinning Mills Ltd., Vs. Assistant Commissioner of Income-tax related to the expenditure on replacement of the machinery parts. The assessee therein engaged in the business of manufacture and trading in cotton yarn and allied products and the assessee incurred expenditure in respect of replacement of certain textile machinery. On a question as to whether such replacement of parts would be current repairs of capital in nature, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the question as to whether the expenditure incurred by the assessee conceptually is revenue or capital in nature is not relevant for deciding the question whether such expenditure comes within the etymological meaning of the expression "current repairs". In other words, even if the expenditure is revenue in nature, it may not fall in the connotation of "current repairs" - [2007] 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.) (iii) A new asset or new/different advantage cannot amount to `current repairs'. - 2009-TIOL-86-SCII (CIT Vs. Sri Mangayarkarasi Mills P. Limited) (iv) Repair implies existence of a part of the machine which has malfunctioned, thereby requiring repair to that machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , reported in (1967) 66 ITR 710 (SC) on the issue of current repairs and pointed out that so long as there is no change in the performance of the machinery and the parts that were replaced performing precisely the same function, expenditure could only be concerned as current repairs of the plant and machinery. 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 obtaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpenditure qualifies to be considered as current repairs under Section 31 of the Act. In so holding, after referring to the decision of the Apex Court in the case of CIT Vs. M/s.Saravana Spinning Mills P.Ltd., reported in (2007) 293 ITR 201, this Court further pointed out to the decision of the Apex Court where it cautioned that all repairs are not current repairs on Section 31(1) of the Act; Section 31(1) of the Act limits the scope of allowability of expenditure as deduction in respect of repairs made to machinery, plant or furniture by restricting it to the concept of "current repairs". Thus, this Court pointed out that what is allowable as revenue expenditure under Section 37 of the Act are those expenditure other than one falling for c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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