Replacement of machines as a whole cannot be held as revenue expense

CIT Vs. The Jawahar Mills Ltd. (Madras High Court)

The total replacement cost of three machineries in question purchased by the Assessee amounting to Rs.54,59,149/- came to be allowed by the Tribunal as ‘repairs maintenance expenditure’ or ‘revenue expenditure’. The said findings of the learned Tribunal are clearly contrary to the decision of the Hon’ble Supreme Court (cited supra) and therefore, the view of the Tribunal cannot be sustained and the replacement of the machineries as a whole by the Assessee cannot be held to

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