Case Law Details
ACIT Vs Bajaj Holdings & Investment Ltd (ITAT Mumbai)
The issue under consideration is whether the replacement of jigs and fixtures considered as revenue expense or capital expense?
ITAT states that, the expenditure incurred on replacement of jigs and fixtures are basically tooling aids required in the production process and these items are part of the machinery in automobile industry. ITAT find that these jigs and fixtures need to be constantly replaced due to constant wear and tear and also due to changes in the design of the part. It is not in dispute that the expenditure incurred on jigs and fixtures at the time of first purchase together with the main plant and machinery was duly capitalised by the assessee at the time of first purchase for the purpose of Income Tax Act and depreciation claimed accordingly for the purpose of Income Tax Act. Later, whenever the said jigs and fixtures were replaced for the reasons stated supra, the assessee has been claiming the same as revenue expenditure for the purpose of Income Tax Act. ITAT find that this argument was duly appreciated by the ld. CIT(A) and the ld. CIT(A) duly granted relief to the assessee in this regard. In view of our aforesaid observations and the decision of jurisdictional High Court referred to supra, ITAT do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee. Accordingly, the ground raised by the revenue is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
These appeals in ITA No.6324/Mum/2010, 6325/Mum/2010, 6963/Mum/2014 & 6964/Mum/2014 for A.Y.1990-91, 1991-92, 1993-94 & 1994-95 respectively arise out of the order by the ld. Commissioner of Income Tax (Appeals)-24, Mumbai in Appeal Nos. CIT(A)-24/LTU/DCSR.43/27/93-94, CIT(A)-24/LTU/DCSR.43/36/94-95, CIT(A)-LTU/Set-aside/2/2014-15 & CIT(A)-LTU/Set-aside/1/2014-15 respectively dated 25/06/2010 & 27/08/2014 respectively (ld. CIT(A) in short) against the order of assessment passed u/s. 143(3) and 143(3) set-aside by the ITAT u/s. 254 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 10/03/1993, 23/03/1994 & 27/12/1995 respectively by the ld. Dy. Commissioner of Income Tax, Special Range-43, Mumbai & ld. Dy. Commissioner of Income Tax, Special Range-34, Mumbai respectively (hereinafter referred to as ld. AO).
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