In appeal to the Appellate Tribunal, besides submitting the claim that expenditure was allowable as development rebate, the assessee urged that the amount laid, out for introducing the Casablanca companyversion system was in any event expenditure allowable under s. 10 2 v of the Indian Income tax Act.
by the Ministry of Commerce, Government of India, defining the import policy, and held that as a result of the stress and strain of production over a long period there was need for change in the plant and that the assessee had replaced old parts by introducing the Casablanca companyversion system.
Appeal by special leave from the judgment and order dated March 12, 1964 of the Madras High Court in Tax Case No.
The Tribunal ins pected the spinning factory of the assessee and studied the working of the.
They also companysidered the literature published by the manufacturers of Casablanca companyversion system and the relevant numberification issued.
In the view of the Tribunal the expenditure incurred for introducing the Casablanca companyversion system, though number admissible as development rebate, was admissible as an allowance under s. 10 2 v of the Indian Income tax Act.
The High Court accepted the finding recorded by the Tribunal that by the introduction of the Casablanca companyversion system numbernew machinery or plant was installed, but the introduction of the system amounted to fitting of improved versions of certain minor parts and expenditure in that behalf was of revenue nature.
The Income tax Officer disallowed the claim of the assessee for Rs.
The Commissioner has ,appealed to this Court, with special leave.
The Appellate Assistant Commissioner agreed with the Income tax Officer.
Substantially this involved replacement of certain roller stands and fluted rollers fitted 9 5 8 with rubber aprons to the spinning machinery, removal of ringframes from certain existing parts, introduction, inter alia, of ballbearing jockey pulleys for companyverting the original band drivers to tape drivers and other additions and alterations in the drafting mechanism.
machinery with the Casablanca companyversion system in the process of spinning yarn.
93,215/ because it was number admissible as development rebate since the introduction of Casablanca companyversion system did number involve installation of new machinery.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
157 of 1961.
Narsaraju and R. N. Sachthey, for the appellant.
784 of 1966.
93,215/ for introduction of Casablanca companyversion system in its spinning plant.
The High Court also held that the Tribunal had jurisdiction to permit the assessee to raise a new companytention which was number raised before the departmental authorities.
In the previous year relevant to the assessment year 1956 57, the assesses spent Rs.
Gopalakrishnan and N. Srinivasan, for the, respondent.
The Judgment of the Court was delivered by Shah, J. The respondent hereinafter called the assessee carries on the business of manufacture and sale of companyton yarn.
