The Commissioner of Income TaxCoimbatore v. J Ramanuja NagarUppilipalayam P.OCoimbatore 641 015
Case at a glance
Outcome
Disposed of
With the above observations, the appeals are disposed of
Provisions considered
Key paragraphs
- Para 11. Whether the replacement of machinery parts will amount to revenue expenditure or not ?2. Whether bringing into existence of a new asset or obtaining a new advantage would amount to revenue expenditure or not ?3. It is submitted across the bar by the learned…
Judgment
IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 28.04.2009CORAM:THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIANANDTHE HONOURABLE MR.JUSTICE M.M.SUNDRESHTax Case(Appeal) Nos.1030 and 1031 of 2008 The Commissioner of Income TaxCoimbatore .. Appellant in both Appeal-vs-M/s The Silical Metallurgic Ltd.,473J Ramanuja NagarUppilipalayam P.OCoimbatore 641 015... Respondent in bothTAX CASE (APPEALS) filed under Section 260 A of the Income TaxAct, 1961 against the order of the Income Tax Appellate Tribunal, MADRAS 'D' Bench, Chennai dated 31.8.2005 passed in ITA.Nos.1346 and1347/Mds/2002 relating to the assessment years 1993-94 and 1994-95respectively. against the Order of the Commissioner of Income Tax(Appeals), Coimbatore dated 20.5.2002 and made in ITA NOS. 223-C &224-C/2000-2001 against P.A.NO/GI.No.CQ-1002/SR-II/CBE on the file of the Joint Commissioner of Income Tax Special Range II Coimbatoredated 3.8.2000 for the assessment Years 1993-94, 1999-95 respectively. For Appellant : Mr.T.RavikumarFor Respondent: Mr.VenkatanarayananJ U D G M E N T (Judgment of the Court was delivered by K.RAVIRAJA PANDIAN,J)The revenue is on appeal against the order of the Income TaxAppellate Tribunal MADRAS 'D' Bench, Chennai dated 31.8.2005 passed in ITA.Nos.1346 and 1347/Mds/2002 relating to the assessment years1993-94 and 1994-95 respectively. The substantial questions of law formulated for entertainment of the appeals are as follows:- https://hcservices.ecourts.gov.in/hcservices/ "
Operative part
Whether the replacement of machinery parts will amount to revenue expenditure or not ?2. Whether bringing into existence of a new asset or obtaining a new advantage would amount to revenue expenditure or not ?3. It is submitted across the bar by the learned counsel appearing on either side that the above question of law is covered by the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Ramaraju Surgical Cotton Mills reported in 294 ITR 328,wherein the Judgment of this Court in Commissioner of Income Tax(Appeals) vs. Janakiram Mills Limited reported in 275 ITR 430 was considered by the Supreme Court with reference to the contention of the assessee that replacement of assets without increasing the production capacity would amount to revenue expenditure. The SupremeCourt remanded the matter by observing that there are a number of tests which are required to be considered while deciding whether the expenditure was revenue or capital in nature. In the absence of the requisite details regarding the production capacity remaining constant even after replacement, the matter could not be decided on merits and require to be remitted back to the Commissioner (Appeals)for consideration of that particular issue with reference to the production capacity. In this case also, there is no material available as to the increase or otherwise of the production capacity in replacement of the machineries. Without the factual details, the questions of law cannot be decided. Hence this case also require tobe remitted back to the Commissioner of Appeals as done by the Supreme Court in the aforesaid decision. 4. Hence, the order of the Tribunal is set aside and the matter is remitted back to the Commissioner of Appeals to redo the exercise as directed by the Supreme Court in the case of Commissionerof Income Tax vs. Ramaraju Surgical Cotton Mills reported in 294 ITR328. With the above observations, the appeals are disposed of. Nocosts. Sd/Asst. Registrar/true copy/Sub Asst. Registrarkrr/ https://hcservices.ecourts.gov.in/hcservices/ To1. The Registrar, The Income Tax Appellate Tribunal, "D" Bench, Besant Nagar, Chennai.
The Commissioner of Income Tax(Appeals), Coimbatore.
The Joint Commissioner of Income Tax, Spl Range II, Coimbatore1 cc To Mr.J.Naresh Kumar, Advocate, SR.18858T.C.A.Nos.1030 and 1031 of 2008mbs(co)pmk.15.6.2009
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.