COMMISSIONER OF INCOME TAX Vs. RAJARATHNA MILLS LTD

JUDGEMENT

(1.) The above tax case appeal is directed against the order of the Income-Tax Appellate Tribunal dated 5.7.2006 made in ITA No. 1400/Mds/2005 for the assessment year 1999-2000.

(2.) The Revenue is the appellant. The issue raised in this appeal relates to the assessment year 1999-2000. The Assessing Officer, on completing the assessment, disallowed the claim of the assessee in respect of the expenditure incurred on replacement of one No. of simplex machine and for modernization of the mill as revenue expenditure and treated the same as capital expenditure. Aggrieved, the assessee went on appeal and the Commissioner of Income-Tax (Appeals) held in favour of the assessee. The Revenue took up the issue before the appellate Tribunal and the Tribunal held the issue on favour of the assessee. Hence, this appeal by the Revenue raising the following questions of law:

(3.) Mr. N. Muralikumaran, learned Standing Counsel for the appellant, fairly concedes that the issues raised in this appeal are covered against the Revenue in view of the decision of this Court in Commissioner of Income-tax v. Janakiram Mills Ltd., 2005 275 ITR 403.