COMMISSIONER OF INCOME TAX Vs. MODI INDUSTRIES LIMITED

JUDGEMENT

(1.) Following question is referred for the opinion of this court by the Income Tax Appellate Tribunal ("the Tribunal" in short) on the application of the Commissioner under Section 256(1) of the Income Tax Act (hereinafter referred to as "the Act).

(2.) In the assessment year in question i.e. assessment year 1982-83 the assessee had claimed the deductions on account of "Repairs of Plant and Machinery". According to the assessee it had incurred an expenditure of '26,50,090/- on such repairs in its Banaspati Unit. The Assessing Officer (AO) disallowed the expenditure to the extent of '8,12,894/- holding the same to be capital in nature and therefore inadmissible. The details of these expenses are as under:-

(3.) The CIT (A) sustained the disallowance in respect of items a, b, d, e, f, k and l amounting to '3,05,560. In respect of other items namely c, h, I, j and m, CIT (A) held that those were revenue expenses and were therefore allowed. Thus, out of '8,12,894 disallowed by the AO, he allowed deduction of '5,07,234. In further appeal preferred by the assessee, all the remaining items of expenditure are also allowed by the Tribunal treating the same as the revenue expenditure. It is in this back-drop aforesaid question is referred for opinion.