IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 08.03.2022

CORAM :

THE HONOURABLE MR. JUSTICE R. MAHADEVAN

AND

THE HONOURABLE MR. JUSTICE J.SATHYA NARAYANA PRASAD

TAX CASE APPEAL NO.331 OF 2011

Commissioner of Income Tax - I

Chennai.

...Appellant/

Appellant

-vs-

M/s.TVS Motor Company Ltd.,

No.29, Haddows Road,

Chennai - 600 006.

...Respondent/

Respondent

Tax Case Appeal filed under Section 260A of the Income Tax

Act, 1961 against the order dated 21.12.2010 passed by the

Income Tax Appellate Tribunal, Madras “C” Bench, Chennai in

I.T.A.No.976/Mds/2009 for the assessment year 2000-2001.

against the order of the Commissioner of Income Tax

(Appeals)III, Chennai-34, dated 24.12.2009 and Made in

ITA.No.313/07-08/A-III for the assessment year 2000-2001 and

against the order Assistant Commissioner of Income Tax, Company

Circle-III(2), Chennai, dated 29.11.2007 and made in

PA.No/GIR.No.32024-T for the assessment year 2001-2002.

For Appellant

:

Mrs.V.Pushpa

Junior Standing Counsel

For Respondent : Mr.Subburaya Aiyar Padmanabhan

J U D G M E N T

(Judgment was delivered by R. MAHADEVAN, J.)

This tax case appeal has been filed by the appellant /

Revenue, calling in question the correctness of the order dated

21.12.2010 passed by the Income Tax Appellate Tribunal, 'C'

Bench, Chennai, in I.T.A.No.976/Mds/2009, relating to the

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assessment year 2000-01.

2.On 26.09.2011, this Tax Case Appeal is admitted on the

following substantial questions of law:-

"1. Whether on the facts and in the

circumstances of the case, the Income Tax Appellate

Tribunal was right in law in holding that the

expenditure on replacement of dies and moulds were

to be allowed as revenue expenditure, contrary to

the decisions of the Supreme Court in the case of

Saravana Mills Ltd. (293 ITR 201) and similar other

decisions especially when such expenditure was not

debited in the Profit and Loss Account, but only

claimed in the Income Tax Adjustment Statement?

2. Whether on the facts and in the

circumstances of the case, the Income Tax Appellate

Tribunal was right in holding that 100%

depreciation on the cost of civil works in

connection with the Reverse Osmosis Plant as well

as ceilings and partitions?"

3.When the matter was taken up for consideration, the

learned counsel for the appellant / Revenue submitted that the

first substantial question of law has already been considered and

decided by this court in favour of the assessee by judgment dated

09.01.2014, passed in TCA.Nos.173 and 174 of 2009, in respect of

the assessee's own case. The relevant passage of the said

judgment is usefully extracted hereunder:

“29. As regards the expenditure on dies & moulds,

the assessee pointed out that it debited an amount of

Rs.11,17,68,169/- towards dies and moulds only to

replace them in the place of worn out dies and moulds.

The assessee in the memorandum of income added this

amount to the total income and claimed the cost of

dies and moulds of Rs.22,66,52,504/- under Section 31

of the Act. The assessee stated that within a period

of one year of installation, the life of the dies and

moulds would become obsolete and this was due to high

production involved. Thus, replacement of the new dye

in the place of old dye would quality for current

repairs under Section 31 of the Act. The Assessing

officer, however, rejected the contention of the

assessee and the Assessing Officer pointed out that

the assessee was claiming depreciation upto 1999-2000

under Section 32 of the Act and only in the year under

consideration, it started claiming deduction under

Section 31 of the Act. The Tribunal pointed out that

the dies and moulds were not plant and machinery, yet

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the replacement of dies and moulds were not in the

nature