K. Shivashankar Bhat, J.—Under the provisions of the Income Tax Act, 1961, the following questions are referred for our consideration :

"1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in allowing the assessee's appeal directing the Income Tax Officer to allow expenditure of Rs. 33,427 and Rs. 39,668 for the assessment years 1980-81 and 1981-82, respectively, being the expenditure incurred on replacement of damaged moulds as revenue expenditure ?

2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in allowing the expenditure of Rs. 32,533 incurred on replacement of runners and end rings as revenue expenditure for the assessment year 1981-82 ?"

2. The references are argued mainly with reference to the moulds with an understanding that the second question has to be answered in the affirmative and against the Revenue.

3. The facts are simple; the assessee requires moulds to complete its manufacturing process in its factory; these undergo damage frequently to such an extent that they have to be replaced so that the assessee could carry on its business effectively. Since mould