Replacement/ substitution of HF Reactor is capital expenditure eligible only for depreciation

Tanfac Industries Ltd. Vs ACIT (ITAT Chennai) ITAT Chennai held that replacement/ substitution of HF Reactor is capital expenditure and eligible for depreciation only. Such replacement couldn’t be considered as ‘current repairs’. Facts- The assessee is engaged in manufacturing of fluorine-based chemicals. The assessee incurred expenditure on repairs and renovation of worn-out reactors and claimed the same to be revenue expenditure. It transpired that the assessee replaced its old reactor with new reactor costing Rs.3 Crores. The capacity of old reactor and new reactor is stated to be the...