MODELLA WOOLLENS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference made by the Tribunal under s. 256(1) of the I.T. Act, 1961, the following questions have been referred to us for our determination :

(2.) AT the outset it may be stated that out of the aforesaid four questions it is unnecessary to set out in detail the facts concerning question No. 3, inasmuch as, in our view, the answer to that question is covered by two decisions, one of the Gujarat High Court and the other of the Allahabad High Court, the former in CIT v. Elecon Engineering Co. Ltd. : [1976]104ITR510(Guj) and the latter in Addl. CIT v. Hind Lamps (P.) Ltd. : [1977]106ITR360(All) . Following the principle of adopting uniformity on questions arising under fiscal statutes we would answer the question having regard to the aforesaid two decisions. In view of the said two decisions, the question is answered in the affirmative and in favour of the assessee.

(3.) MR . Mehta appearing for the assessee has contended before us that having regard to fact that there was an existing kacha road being an approach road to the factory, it could be said to have been substantially repaired by the assessee -company by incurring the expenditure in question, and the expenditure ought to be regarded as revenue expenditure. He invited our attention to the copy of the bill dated March 13, 1962, which had been marked annex. 'A' to the statement of case and relying upon the fact that a sum of Rs. 12,318.80 had been spent in respect of the quantity of work to the extent of 10,712 sq. ft. having been done, the expenditure should be regarded not as a capital expenditure but revenue expenditure incurred for the purpose of carrying out repairs to the existing road. In support of this contention, he placed reliance upon two decisions both of the Punjab High Court, one in CIT v. S. B. Ranjit Singh and the other in Panipat Co -operative Sugar Mills Ltd. v. CIT .