1. The facts which give rise to this reference are few but they raise a rather interesting question: In the calendar year 1951, which is the previous year of the assessee company which is a textile Mills the assessee company spent a sum of Rs. 30,557/- at Rs. 47/- per piece for replacing certain parts in 646 looms out of 864 looms which these mills possessed. This particular part that was replaced was a device which helped in keeping a certain tension for the working of the looms.

The old parts which were replaced had become completely worn out, they were heavy in weight and were also of a construction which made them not easily workable. Further these old parts were not available in the market and if an attempt had been made to prepare parts similar in kind or to acquire them, the cost would have been disproportionately high.

The assessee company therefore replaced these parts with the parts of a new type which were lighter in weight, could be lifted with the toe of the foot, conformed to the international labour standard and were superior to the old parts. It also appears that the looms could be worked and in fact had been worked with these old parts for a period of 60 year