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Querist : Anonymous

Querist : Anonymous (Querist)

02 February 2010 whether replacement of worn out spindles in a textile mill is a revenue expenditure

CA. Varun Goel

CA. Varun Goel (Expert)
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02 February 2010 Any replacement in the fixed asset is a revenue expenditure unless it increases the capacity or life of the fixed asset

In your case if the replacement does not increase the capacity or life of the fixed asset then it is a revenue expenditure

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)
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02 February 2010 Agree. CA Varun is right.

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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02 February 2010 AGREE

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 February 2010 Can be claimed as revenue expenditure in view of the Karnataka High Court decision in
CIT Vs. Sagar Talkies (2008) 173 Taxman 12 (Karn).
In the cited case court concluded that expenditure on account of replacement of old worn out mono sound system with a new stereo system is revenue expenditure.