9911796707
TMI Blog1981 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ishments, namely, five textile mill units and a dye works, with a capacity of over 2,00,000 spindles and over 600 looms. In the weaving sheds of mills Nos. 2, 3 and 4 and in the folding, sizing and drawing depts. the assessee-company replaced ordinary lighting by fluorescent tubes, incurring an expenditure of over Rs. 2,15,000 for the purpose. According to the ITO, this expenditure brought to the assessee an advantage of enduring nature and it was of a capital nature. The AAC agreed with the view taken by the ITO. The matter was carried to the Income-tax Appellate Tribunal, and the Tribunal upheld the contention of the assessee, holding that this was revenue expenditure covered by s. 10(2)(xv) of the Indian I.T. Act, 1922. However, the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; in the course of recovery of income-tax demands relating to the assessment years 1946-47 to 1956-57. " Both these items were disallowed by the ITO, and this disallowance was sustained by the AAC. The Tribunal, however, found in favour of the assessee. It is from the decision of the Tribunal that five questions have been referred to us by the ITO : " (1) Whether, on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " As far as questions Nos. 4 and 5 are concerned, they would appear to be concluded in favour of the assessee by the decision of this court in CIT v. Gannon Dunkerley & Co. Ltd. [1979] 119 ITR 595. These questions, therefore, will have to be answered in the affirmative and in favour of the assessee. As far as question No. 1 is concerned, it has been found by the Tribunal that under the improved system better lighting was provided to the workers. The Tribunal went on to add that it was not possible to speculate how far efficiency improved. In the view of the Tribunal, the mere fact that the expenditure bad brought the benefit of a larger life to the asset and better service would not make the expenditure capital in nature. Section 10(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court, which held that the expenditure could not be said to be: laid out either to acquire an asset or to acquire any advantage of an enduring nature. The case before us is not identical with the case before the earlier Bench or before the Delhi High Court, but the principles laid down in the above cases are applicable. We are in concurrence with the view of the Tribunal that there was no capital asset acquired nor could the assessee be said to acquire any advantage of an enduring nature. If so, the Tribunal was right in allowing the expenditure under s. 10(2)(xv) of the Indian I.T. Act, 1922. Question No. 1 also will have to be answered in favour of the assessee. As regards questions Nos. 2 and 3, it is difficult to find anything to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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