- (1.) This appeal by special leave is directed against the judgement and order of the High court of Kerala at Ernakulam in I. T. A. 20 of 1999 dated March 14, 2002. By its aforesaid judgment and order dated 11th March, 2002 read with revised order dated 14th March, 2002, impugned herein, out of the two questions referred to the High Court for its opinion, it answered the first question in favour of the revenue, and directed that the second question, together with the question as to whether the claim of deduction of the amount could be claimed under Section 37 of the Act, be considered by the Tribunal. It accordingly, remitted the matter to the Tribunal for fresh disposal of the matter on the aforesaid two questions.
(2.) The facts of the case may be briefly noticed:- the S. T. N. (Respondent herein) is a company running a textile mill. We are concerned with the assessment year 1991-1992. The assessee claimed a deduction of a sum of rs. 11,11,600/- which amount it had incurred for replacement of the electric control panel. The assessing Officer took the view that the said expenditure was in the nature of capital expenditure and therefore, no deduction was allowable under Section 31 (1) of the Income Tax act. It negatived the claim of the assessee that the amount was spent on "current repairs" and therefore, covered by Section 31 of the Income Tax Act.
(3.) It, therefore, held that the expenditure was a capital expenditure on which only depreciation was allowable and accordingly, allowed depreciation amounting to rs. 2,77,900/- and added back the balance amount of Rs. 8,33,700/ -.;