Law: Income Tax Act, 1961

Section: 37

Income-tax--Capital or revenue expenditure---Expenditure on maintenance of machinery--- Revenue expenditure--Indian Income Tax Act, 1961,.S.37. Held, that, on the facts and in circumstances of the case, the Tribunal was justified in holding that the expenditure incurred by the assessee under the head "Machinery maintenance" was revenue in nature and was an allowable deduction. C.I.T. v. Cooperative Sugars Ltd: (1999)235 ITR 343 (Ker.) fol. THIS JUDGMENT DELIVERED BY: OM PRAKASH, C.J.---Pursuant to the directions given by this Court vide judgment, dated October 27, 1994, under section 256(2) of the Income Tax Act, 1961 (briefly, the Act) the Income-tax Appellate Tribunal (Cochin Bench) referred the following question, relating to the assessment year 1984-85, for the opinion of this Court: "Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that the expenditure incurred by the assessee under the head 'Machinery maintenance' is revenue in nature and is an allowable deduction?" The case of the assessee was that during the previous year relevant to the assessment year 1984-85, it incurred expenditure aggregating to Rs.8,40,542 on the replacement of machinery as follows: Items Amounts (Rs.) (a) Crystalliser 1,70,355 (b) Crystalliser 1,67,355 (c) Kirloskar machine pump with sleeve 26,938 (d) Cavity lime water pump 11,244 (e) Sulphur furnace 85,844 (f) Kirloskar 180 KW 10 HP motor. 1,64,027 (g) Kirloskar…

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