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section 4 of the Companies (Profits) Surtax Act, 1964 - Deductions - Whether expenditure incurred on repair of furnaces is revenue expenditure and, thus, deductible from income - Held, yes Facts In the accounting year relevant to the assessment year 1968-69, the assessee-company incurred certain expenditure for repair of furnaces at its factory, and claimed it as revenue expenditure in the income-tax assessment. The assessee's claim was finally accepted by the Tribunal. On reference by the revenue, the High Court also upheld the assessee's claim. In the case of surtax assessment, the assessee claimed deduction of the said expenditure from the income. The ITO allowed only that part of the amount which had been debited in the books of account. On appeal, the AAC allowed the claim in full, on the ground that the expenses incurred were revenue in nature. The Tribunal upheld the AAC's order. On reference : Held Since this Court in the reference under the Income-tax Act has held that the impugned expenditure over repair of the furnaces, were revenue expenditure and were deductible as such, that opinion must prevail in the present case as well. Accordingly, the Tribunal was correct in holding that the entire amount urns deductible for computing surtax liability. Case referred to CIT v. Seraikella Glass Works (P.) Ltd. [1986] 157 ITR 584 (Pat.). JUDGMENT Uday Sinha, J. - This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act'). It relates to deduction under the Companies (Profits) Surtax Act, 1964 ('the 1964 Act'). The reference relates to the assessment year 1968-69. The question referred to us for our opinion is as follows : "1. Whether, on the facts and in the circumstances of this case, the Tribunal were correct in law in holding that the entire amount of Rs. 5,02,654 was deductible for computing surtax liability ?" 2. The assessee is a private limited company engaged in the business of manufacture and sale of glass. In the assessment year in question a sum of Rs. 5,02,654 was spent for repair of furnaces at the assessee's factory at Kendra and Konnagar. The assessee claimed it as deductible expenditure in the income-tax assessment on the…

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