Expenditure on replacement of machinery cannot be regarded as current repairs

SUPREME COURT OF INDIA

Commissioner of Income-tax, Madurai

Versus

Sree Ayyanar Spinning & Weaving Mills Ltd.

CIVIL APPEAL NOS. 3029, 3030, 3036,

3042, 3044, 3045 & 3046 OF 2006

SEPTEMBER 4, 2012

ORDER

Civil Appeal Nos.3029/2006 and 3045/2006:

1. Heard learned counsel on both sides.

2. These matters are squarely covered by the judgments of this Court in the cases of CIT v. Saravana Spg. Mill (P.) Ltd. [2007] 293 ITR 201 and CIT v. Ramaraju Surgical Cotton Mills [2007] 294 ITR 328.

3. Accordingly, the civil appeals filed by the Department are disposed of in terms of the judgements of this Court in Saravana Spg. Mills (P.) Ltd. (supra) and Ramaraju Surgical Cotton Mills (supra) with no order as to costs.

Civil Appeal No. 3036 of 2006, Civil Appeal No. 3044 of 2006, Civil Appeal No. 3042 of 2006, Civil Appeal No. 3046 of 2006 and Civil Appeal No. 3030 of 2006:

4. In these appeals filed by the Department, the issue which arises for determination is, whether the expenditure incurred by the assessee during the Accounting Year towards cost of replacement of machinery is an amount paid on account of current repairs allowable under Section 31 of the Income Tax Act, 1961? This issue is squarely covered by the decision of this Court in the case of Saravana Spg. Mills (P.) Ltd. (supra).

5. Accordingly, the civil appeals filed by the Department stand disposed of with no order as to costs.