COMMISSIONER OF INCOME TAX Vs. VANAJA TEXTILES LTD

JUDGEMENT

(1.) THESE IT references are in respect of one assessee for the period 1973 -74 to 1980 -81. Since all these reference relate to one assessee and in the majority of cases, one general question arises for consideration, we propose to dispose of all these references by a common judgment. Of course in regard to certain cases, apart from the general question, some other questions are also referred for decision. Except IT Ref. Nos. 60 of 1983 and 52 of 1986, all the references are at the instance of the Revenue, some of these references are under s. 256(2) of the IT Act, 1961.

(2.) THE common question referred to for our opinion we proposed to consider with reference to IT Ref. Nos. 105/1989 and 106/1989. We do so, since these ITRs. arise from the asst. yrs. 1973 -74 and 1974 -75 and the common question has been decided by the Tribunal in other ITRs, following the decision by the Tribunal for the asst. yrs. 1973 -74 and 1974 -75. IT Ref. Nos. 105 & 106 of 1989 :

(3.) THE assessee is a company doing business in manufacture of yarn. The company undertook a comprehensive scheme of modernisation and rehabilitation of old machinery in the mills from October 1972 onwards. This was done on the report to the shareholders by the directors stating that it is being done to bring the mill in line with modern mills. The company had as a first step converted 14 carving engines to metalic card clothing, costing over Rs. 1 lakh thus considerably getting over the bottleneck of want of supply of enough carded silver to the preparatory section. The items of expenditure involved for the asst. yr. 1973 -74 as stated in the statement of facts are these : For the asst. yr. 1974 -75, the items of expenditure as shown in the statement of case are as follows : . Rs. Wax Assembly 4,970 Second hand Drafting System 2,983 Metalic Card Clothing 57,453 Life Roller Bearing 29,705 Total 95,111 Carding Machine Metallic fitting 1,36,784 Coiler Sets 21,630