Replacement expenditure is neither current repairs nor revenue

The assessee incurred expenditure on replacement of machinery in a textile mill and claimed the same as revenue expenditure on the ground that it was merely for replacement of spare parts in the spinning mill system and did not give rise to a new asset. In the books, the expenditure was capitalized. The CIT (A), ITAT and High Court decided in favour of the assessee. However, on appeal by the revenue, HELD, reversing all the lower authorities: (i) Each machine in a textile mill is a separate and independent item though it is a part of the integrated process of manufacture of yarn and is integra...