CIT & Ors. v. Janakiram Mills Ltd. & Ors.

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The Tax Publishers2005 TaxPub(DT) 1572 (Mad-HC) : (2006) 009 (I) ITCL 0418 : (2005) 275 ITR 0403 : (2005) 196 CTR 0551 : (2005) 146 TAXMAN 0040 CIT v. Janakiram Mills Ltd. INCOME TAX ACT, 1961 Business expenditure - Allowability -Replacement of machinery Assessee-company a textile mill had incurred expenditure on replacement of cards/ blow room machinery, combing machinery, etc., claimed same to be revenue in nature. AO denied claim of assessee. *Held:* Since, entire spinning mill right from blow room to cone winding section should be considered as a single integrated plant and by incurring said expenditure, installed capacity of mill had not enhanced or increased in any manner, therefore, no new assets were created in process of replacement of worn out machines, and hence, expenditure in question was allowable as revenue expenditure. Income Tax Act, 1961, Section 37(1) A.Y.: 1986-87 Decision: In favour of assessee. CIT v. Janakiram Mills Ltd. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2005 TaxPub(DT) 1572 (Mad-HC) : (2006) 009 (I) ITCL 0418 : (2005) 275 ITR 0403 : (2005) 196 CTR 0551 : (2005) 146 TAXMAN 0040

CIT v. Janakiram Mills Ltd.

INCOME TAX ACT, 1961

Business expenditure - Allowability -Replacement of machinery

Assessee-company a textile mill had incurred expenditure on replacement of cards/ blow room machinery, combing machinery, etc., claimed same to be revenue in nature. AO denied claim of assessee. Held: Since, entire spinning mill right from blow room to cone winding section should be considered as a single integrated plant and by incurring said expenditure, installed capacity of mill had not enhanced or increased in any manner, therefore, no new assets were created in process of replacement of worn out machines, and hence, expenditure in question was allowable as revenue expenditure.

Income Tax Act, 1961, Section 37(1)

A.Y.: 1986-87

Decision: In favour of assessee.

CIT v. Janakiram Mills Ltd.