DY. COMMISSIONER OF INCOME TAX , CIRCLE-2(2), HYDERABAD vs. GLOBAL ALUMINIUM PRIVATE LIMITED , HYDERABAD

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES : BENCH “A” HYDERABAD (Through Video Conference) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER I.T.A. No. 968/Hyd./2017 A.Y : 2012-13 I.T.A. No. 1374/Hyd./2017 A.Y : 2013-14 I.T.A. No. 483/Hyd./2019 A.Y : 2014-15 I.T.A. No. 678/Hyd./2019 A.Y : 2016-17

Dy.CIT, Circle 2(2) vs. M/s Global Aluminium Pvt. Ltd. Hyderabad \ Secunderabad ITO, Ward 2(2), Hyd [PAN: AAACG7398C]

(Appellant) (Respondent)

For Revenue: Smt. N. Esther, D.R. For Assessee: Sri Y. Ratnakar, A.R Date of Hearing : 01/06/2021 Date of Pronouncement : 16/07/2021 O R D E R PER S.S. GODARA, J.M. These four Revenue’s appeals for AYs 2012-13 to 2014-15 and 2016-17 arise against the CIT(A)-7, Hyderabad’s order dated 27.10.2016 in case no. 262/16-17; CIT(A)-2, Hyderabad’s order dated 30.05.2017 in case no. 83/16-17 ; CIT(A)-12, Hyderabad’s order dated 25.01.2019 in case no. 10221/15-16 , CIT(A)-2, Hyderabad’s order dated 21.02.2019 in case no.

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 10327/16-17 ; respectively involving proceedings u/s 143(3) of the Income Tax Act, 1961 [the Act for short]. Heard both the parties. Case files perused. 2. It transpires at the outset that the Revenue’s identical sole substantive grievance challenges correctness of both the lower authorities’ action treating assessee’s new dyes expenditure claims of Rs.2,45,64,703/-, Rs.2,49,18,838/-, Rs. 3,64,61,700/- and Rs.3,49,81,040/-; assessment year wise, respectively, made in the course of corresponding assessments. Both the learned representatives lead us to CIT(A)’s lead findings to this effect in first and foremost AY 2012-13 reading as under.

“4. The ground no.1,8 and 9 are general in nature which do not require specific adjudication. Ground no.7 is against charging of interest u/s 234B. As the charging of interest is mandatory and consequential, the ground raised is rejected. The Ground no.2 to 6 are against the treatment of expenditure incurred on 'dyes' as capital expenditure and allowing depreciation. The issue is discussed by the Assessing Officer in the order as under: "During the course of scrutiny proceedings the assessee was asked vide order sheet entry dated 09.03.2015 to explain as to how Die' is treated as consumable and how it is valued for valuation closing stock. In response to the above the assessee furnished the information dated 13.03.2015 as follows: "The average die life in our industry is about 5-7 M. T depending upon the criticality of the profile and no. of runs. We import the alloy die steel of different diameter as per the requirement of the size and shape of the profile, and sent it on job work for die making as per the customers required profile. Once the die is made it is the exclusive profile useful to the requirement of the only customer for whom we have made and not useful for general market. We also have agreements with the customers for maintaining exclusivity of the dies. We have a exposure of 65-70% of consumer sales were in the sales price is more in comparison as we spend for the die cost.

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. The dies are made as per project wise or the product wise and keeps changing for the other project and changes, modification in the product where out aluminium is being used. The old dies become obsolete and not useful. Thus the dies are treated as consumables. We as a practice only account the die steel in closing stock wise, has value and can be used for any die manufacturing and book the made dies under consumption as only value for the single user, otherwise waste for the industry. However this is being compensated in the selling price. If any stock of unbroken dies lying may be used for future production and resulting in cost saving or may not be used becoming a dead inventory. " Again vide letter dated 26.3.2015, the AR has submitted that: 'Note on valuation of closing stock’ We would like to inform your goodself that the closing stock quantity held is of Die steel. We are enclosing herewith a statement showing stock movement of die steel for your verification. For support of our stock movement, statement we are enclosing herewith dies account which is debited with cost of die steel purchased and cost of job work charges for conversion of die steel into dies. To justify the same copies of bills for die steel purchases and job worker charges are also enclosed herewith for your verification. Thus from stock movement statement your goodself can verify the closing quantity held of die steel and detailed statement of closing stock of die steel has already been produced to your goodself. Note on consumption of dies: The dies received from job workers will be used for designing our finished product. The dies are not independent plant & machinery but just form part of plant & machinery. Thus the dies can be claimed and considered as current repairs ujs.31 of IT Act. Once dies are worn out, the machines cannot turnout the product to the business specifications and this has to be obtained only on a replacement of the dies. The dies will get completely worn out and will become obsolete and sold as die scrap" 4.1 The above reply has been considered. As per the note submitted by the assessee himself of the process of die conversion of die steel, it can be seen that die are getting made by the assessee from die steel and the bills show that these are having independent description with number and accordingly are in the nature of an asset which has to be treated as plant and machinery'. The die are not in the nature of consumables. Whenever the assessee is making expenditure in the form of job work for getting die made from die steel, it is resulting into existence of new asset. The assessee has tried to claim that getting die made out of die steel is u/s.31 of the I. T. Act. that a new asset or 3

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. new/different advantage amount to current repairs . Repairs implies existence part of a machine which has malfunctioned, thereby requiring repair to that machinery, plant etc. Replacement cannot be current repair, for replacement and current repair do not go hand in hand. If one is hold otherwise it would only make section 31(i) wholly redundant and absurd. Replacement expenditure cannot said to be current repairs. It could be possible that in case of peculiar facts of a case, it could be held that the dies for such machines may have been treated as current repairs but the facts of the case of the assessee do not depict that dies are getting made as current repairs for its machines as the provisions of the Income tax Act and Rules do not prescribe that expenditure on account of dies and moulds is to be treated as current repairs. This is also clear from the fact that "Rubber and plastic Goods- Moulds" are treated depreciable assets and higher rate of 40% has been specified on the same in the Income-tax Rules. 4.2. In the above case the assessee has not substantiated as to how the new dies are being made on account of malfunctioning of existing machinery. The assessee has treated that the entire dies being made are consumed during the year itself which cannot be the correct proposition as it cannot be said that the life of die is only of a few months and even the dies which are getting made in the last month of the year can be treated to be entirely consumed. The assessee has neither taken any closing stock of the dies which have been available to it as opening stock and the quantity/amount got made during the year and those which were worn out during the year. If the assessee claims that dies are to be treated as part of plant and machinery then also he should have increased the value of plant and machinery to that extent and claimed depreciation on the same. 4.3. Reference may also be made to the old and new depreciation schedules as per Income Tax Rules also shows that the depreciation on "Rubber and plastic goods factories - moulds" is specified at 400/0. This shows the intention of the legislature that such dies and moulds are to be treated as plant and machinery and depreciation is being allowed to take care of wear and tear of the same. Higher rate of 40% has been specified in the depreciation rules for moulds which are for rubber and plastic goods factories, apparently on account of higher wear and tear of the same. In hew of the above position arc considering all facts of the case, the claim of the assessee for entre expenditure on account of dies as revenue expenditure of Rs.2,45,64,703/- is not found to be acceptable. However, since . it is considered that the expenditure on account of dies is for plant and machinery, depreciation at rate given for plant and machinery is to be allowed on the above account. Therefore, on above account, disallowance to the extent of Rs 2,08,79,997/ (Rs 2,45,64,703/- 15% of Rs. 2,45,64,703/) is being made and added to the total income"

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 5. During the course of appellate proceedings, the assessee reiterated the submissions as made in the statement of facts filed along with the appeal, which are as under:

"2. The appellant is carrying on the business of manufacture of aluminium profiles since the year 1994. During the year, the appellant manufactured 9628 MTs. of aluminium profiles. The sales made are Rs. 154.91 crores. For the manufacture of aluminium profiles of different shapes and sizes for different customers, the appellant made dies out of die steel. During the year roughly about 1200 to 1400 dies of different shapes and sizes have been made for the purpose of manufacture of aluminium profiles and the cost of making profiles aggregating to Rs.2,45, 74, 703 is claimed as revenue expenditure being consumables in nature. 3. The profiles manufactured are in different shapes and sizes The dimensions of profiles to be manufactured given by each customer vary. For manufacture of profiles apart from the plant and machinery required, there has to be a die for the manufacture of profiles of required size and shape. Die is made out of die steel. Die steel (raw material) is normally imported as the same is not produced in India The weight of each die will generally be varying between 20 kgs to 40 kgs. The die steel so cut is given on job work for making the die The die is made by the job worker Thereafter necessary grooves are made in the die in accordance with the design and shape of profile. It is thereafter given for heat treatment After heat treatment there may be some small variations in the shape of die due to heating After receiving the die it is again fine tuned so that the sides, edges and grooves of the profile is perfect. The normal life span of any die ranges upto 10 tons of production The production of 10 MTs for the appellant is less than a day’s job. Many times die has to be scraped much before 10 MTs because the die breaks or the edges are cut or worn out of the die changes shape. In such a case, the die becomes useless and has to be changed. This can occur at the stage of production that is even at one ton or two tons. Its life is much less than one year. This is the reason why throughout the world a die is classified as 'consumables' and does not come under plant and machinery. 4. The appellant has installed plant and machinery to manufacture aluminium profiles. In order to manufacture the profile of the required size and shape, the die made is fixed into aluminium extrusion press and thereafter the profile is drawn. This is akin to a CD or a cassette being inserted into the player before playing or recording. The CD's by themselves do not become the player merely because they are inserted into the player. They are a different item. Likewise, die is also different from plant and machinery.

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 5. Die steel is an alloy and is imported during the year at the rate of Rs.195 per kg. (approx.). A part of die steel is cut and given to job work for making die. Nearly 1/3 of the material goes as wastage while cutting. The job worker charges per piece which works out to Rs.100 (approx.) per kg. for making the die. There is a further cost of RS.1 00 per kg. incurred when it is given for heat treatment. After the die is used or when becomes worn out or after it breaks it can only be sold as scrap and that too as M.S steel scrap at roughly Rs.20 per kg. (approx.) for some and at Rs.60 per kg. for some scrap. Sometimes after placing the order, die is made but the customer does not come back. Then too the dies become scrap as it does not have any value and is not useful for any other application. The above description would only demonstrate that the die is consumable and gets exhausted in production. Its life is very short which is less than 10 MTs. of production and is normally consumed within the same year. (Photo graphs of dies are produced before the learned Commissioner of Income tax for ready understanding of what is a die). 6. It is therefore submitted that the consumables all across the world are not regarded as plant & machinery. In Hyderabad alone there are about 20 to 22 manufacturers of aluminium profiles and in all these cases dies made are treated as consumables. Even in the past years, the cost of die is claimed as expenditure being consumable and was accepted. 7. The Assessing Officer refused to allow the cost of dies as revenue expenditure. He treated the same as capital expenditure and allowed depreciation at 15% instead of the entire amount being allowed as revenue expenditure. The following are the reasons given in the assessment order: a)" In the above case the assessee has not substantiated as to how the new dies are being made on account of malfunctioning of existing machinery" b) " The assessee has treated that the entire dies being made are consumed during the year itself which cannot be the correct proposition as it cannot be said that the life of die is only of a few months and even the dies which are getting made in the last month of the year can be treated to be entirely consumed" c) " The assessee has neither taken any closing stock of the dies which have been available to it as opening stock and the quantity/amount got made during the year and those which were worn out during the year"

d) " If the assessee claims that dies are to be treated as part of plant and machinery then also he should have increased the value of plant and machinery to that extent and claimed depreciation on the same"

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 8. It is contended that the basis on which the Assessing Officer rejected the claim made that the dies are consumable expenditure and not plant and machinery, is erroneous. The appellant submits that the die is specific to execution of a particular order and once the order is executed, the die becomes valueless. In fact it will be completely worn out sometimes before the entire order is executed. Normally the life time of a die will not be more than a few months that is till the order is executed. It can fail even before it can be fully used as explained in the above paras. Once the order is executed of the particular product for a particular customer, the die gets consumed and becomes scrap. It become scrap even earlier also due to breakage, wearing out or becoming out of shape etc. Once the die is made, even if it is not used during the year yet it will have no value. No one buys it and even at the point of making a die, it becomes a consumable though not really consumed. It is useful for only one customer and for one time execution. Since the die is made to execute a particular order the cost of the die is in built into the product cost, charged to the customer. 9. For all the above reasons, throughout the world these are treated as consumables and are never treated as plant & machinery. The appellant finds it difficult to understand the observation of the Assessing Officer that the dies are made on account of some' mal- functioning of the existing machinery. This is absolutely an erroneous statement and appears to be a flaw in his understanding. 10. Since the die does not have lasting life and constitutes consumable, there is no opening and closing value. Die steel is raw material for making a die is always included in the closing stock to the extent not consumed for producing a die. After die is used, it is sold as scrap and the value of scrap is shown in the accounts under the head Revenue from operations and included as part of business receipts in the P&L account. It is assessed as part of business income. The die is made depending on the volume of order – if the order is small say V2 ton or 1 ton, its life will be minimal and will exhaust after the order is executed. In any case its life will not exceed 10 MTs. of production. In the past years, the Assessing Officer has always treated this item as consumable and was allowed as expenditure in the year in which the dies are made while at the same time scrap sale is taxed income. It is only in this year that for the first time that the amount spent on making dies is treated as capital expenditure.

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. another order of another customer. This cycle goes on. Hence, the die made though is temporarily used in the production process it should be treated as current repairs for the reason that the amount spent on making a die has no enduring benefit at all. The die is short lived perhaps a few days or a few months. The value of plant and machinery installed does not appreciate by making a die. The plant and machinery remains the same. Therefore even if it is assumed that it should be treated as plant and machinery, it falls within the realm of current repairs and will be allowable expenditure u/s 31 of the I. T Act. Kind attention is invited to the decision of the High Court in CIT Vs. TVS Motors Ltd. reported in 364 ITR 1 @ pages 11 to 14. The said decision fully supports the appellant's claim. 12. Reference is made by the learned Assessing Officer to a decision of the Hon'ble Supreme Court in CIT Vs. Mangayakrai Kasi Mills Pvt. Ltd. reported in 315 ITR 114. The facts of this case have no relevance at all to the facts on hand. The decision of the Hon'ble Supreme Court pertained to several items of plant and machinery which have been replaced. The old machinery was replaced by the new machinery as a result of which a new asset came into existence in the place of one. This was not a repair of old or the existing machine. What is more the machinery replaced brought about an advantage of enduring benefit. In the facts and circumstances of the case, the Hon'ble Supreme Court held that the replacement should be treated as plant and not merely repairs. The matter related to plant and not consumables. The facts occurring in the decision of the Hon'ble Supreme Court are in no way applicable to the facts of the present case. There was no replacement of plant and machinery. What was made is a die which is totally a consumable item. Therefore, reference to the decision of the Hon 'ble Supreme Court appears to be a misapplication of law to the facts of the case. It has no bearing at all to the case on hand. 13. In the decision of the Hon'ble Supreme Court the assessee himself classified the expenditure as capital expenditure in his accounts. However, for the purpose of Income tax Act, it was claimed as revenue expenditure. The Hon'ble Supreme Court laid emphasis on the treatment given by the assessee in his accounts and hence that it is indicative of what the assessee itself thought of the expenditure. In the appellant's case this situation does not prevail. 14. It is therefore contended that the order of assessment u/s 143(3) of the I. T. Act treating the cost of dies as plant & machinery is arbitrary and untenable for the following among other grounds:"

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 6. During the appellate proceedings, the AR specifically relied on the decision in case of M/s TVS Motors Ltd 364 ITR 1 (Mad), wherein it was discussed as below. "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 qualify 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 u/s 31 of the Act. The Tribunal pointed out that the dies and moulds were not plant and machinery, yet the replacement of dies and moulds were not in the nature of installation of machinery in the factory. Such moulds and dies were normally attached to the machines to suit the individual requirement of particular product. So holding, the Tribunal held that expenditure incurred on replacement of dies and moulds was revenue in nature. It relied on the decision of Karnataka High Court in the case of Mysore Spun Concrete Pipe Pvt. Ltd, reported in 194 ITR159. 30. As far as this issue is concerned, learned counsel appearing for the assessee placed reliance on the decision of this Court reported in (2013) 357 ITR 720 (Mad) in the case of Super Spinning Mills Ltd., Vs. Assistant Commissioner of Income-tax related to the expenditure on replacement of the machinery parts. The assessee therein engaged in the business of manufacture and trading in cotton yarn and allied products and the assessee incurred expenditure in respect of replacement of certain textile machinery. On a question as to whether such replacement of parts would be current repairs of capital in nature, this Court considered the decisions in the case of CIT Vs. Saravana Spinning Mills P; Ltd., reported in (2007) 293 ITR 201 (SC), CIT Vs. Ramaraju Surgical Cotton Mills reported in (2007) 294 ITR 328 (SC) and CIT Vs. Mangayarkarasi Mills P.Ltd., reported in (2009) 315 ITR 114 (SC) and pointed 9

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. out that the question as to whether the expenditure incurred on replacement of machinery is revenue or capital rests on the nature of capital incurred vis-a-vis the benefit derived. This Court referred to the decision in the case of CIT Vs. Saravana Spinning Mills P.Ltd., reported in (2007) 293 ITR 201 (SC) and in particular to the decision in the case of CIT Vs. Sri Mangayarkarasi Mills P.Ltd., reported in (2009) 315 ITR 114 (SC) and pointed out as under:- "10. The question as to whether the expenditure incurred on replacement of machinery is revenue or capital expenditure, particularly in the nature of replacements of parts, thus rests on the nature of expenditure incurred, vis-a- vis the benefit that the assessee derives. The ratio deductible from the decisions referred to above are: (i) To decide the applicability of Section 31(1), the test is not whether the expenditure is revenue or capital in nature, but whether the expenditure is "current repairs". The basic test is to find out whether expenditure is incurred to "preserve and maintain" an already existing asset and the expenditure must not be to bring a new asset into existence or to obtain a new advantage vide {2007J 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.) (ii) Under Section 31(1), the deduction admissible is only for current repairs. Therefore, the question as to whether the expenditure incurred by the assessee conceptually is revenue or capital in nature is not relevant for deciding the question whether such expenditure comes within the etymological meaning of the expression "current repairs". In other words, even if the expenditure is revenue in nature, it may not fall in the connotation of "current repairs" [2007J 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.) (iii) A new asset or new/different advantage cannot amount to 'current repairs'. - 2009- TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. limited) (iv) Repair implies existence of a part of the machine which has malfunctioned, thereby requiring repair to that machinery, plant etc. Replacement cannot be a current repair, fort "replacement" and "current repair" do not go hand in hand. If one is to hold otherwise, it would only make Section 3i(i) wholly redundant and absurd. Thus, replacement expenditure cannot be said to be 'current repairs' vide [2007J 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.) and 2009- TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited) (v) Expenditure is deductible under section 37 only if it (a) is not deductible under sections 30-36/ (b) is of a revenue nature, (c) is incurred during the current accounting year and (d) is incurred wholly and exclusive IV for the

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. purpose of the business. - 2009- TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited); (vi) Expenditure is of a capital nature when it amounts to an enduring advantage for the business and repair is different from bringing a new asset for the business. Further, bringing into existence a new asset or an enduring benefit for the assessee amounts to capital expenditure vide Lakshmiji Sugar Mills (P) Co. v. CIT (AIR 1972 SC 159) referred in 2009TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited). (vii) Therefore, whether an expenditure is revenue or capital in nature would depend on the facts of each case. - [2007J 293 ITR 201 (SC) (Commissioner of Income Tax Vs. Saravana Spinning Mills P. Ltd.)" This Court also referred to the decision in the case of CIT Vs. Mahalakshmi Textile Mills Ltd., reported in (1967) 66 ITR 710 (SC) on the issue of current repairs and pointed out that so long as there is no change in the performance of the machinery and the parts that were replaced performing precisely the same function, expenditure could only be concerned as current repairs of the plant and machinery. 31. Applying the ratio of the decision cited above, when we look into we facts of the above cases, it is evident that with regard to the moulds and dies attached to the machinery like press designs specification, moulds and dies are not independent of the plant and machinery, but are parts of the machinery. Once the dies are worn out, the machines cannot turn out the product to the business specifications and this has to be obtained only on a replacement of the dies and moulds, a fact which is not refuted by the revenue. It is no doubt true that the assessee claimed depreciation on dies and moulds. Yet in the decision in the case of CIT Vs. Mahalakshmi Textile Mills Ltd., reported in (1967) 66 ITR 710 (SC), the Apex Court pointed out that all questions whether of law or of fact, which relate to the assessment year of the assessee could be raised in any year under consideration before the Officer as well as before the Income Tax Appellate Tribunal too and if, for reasons recorded by the departmental authorities in rejecting a contention raised by the assessee, the grant of relief to an assessee is justified on another ground, the Revenue is bound to consider such claim of granting the relief. The Apex Court pointed out that the right of the assessee to the relief is not restricted to the plea raised by him. On the facts before us, when the dies and moulds were attached to the machine to manufacture the designed product, we have no hesitation to accept the plea of the assessee that the claim would fall for consideration only under Section 31 of the Act.

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. 32. In the unreported decision of this Court dated 27.04.2012 in Tax Case (Appeal). No. 1011 of 2005 (The Commissioner of Income Tax, Madurai Vs. M/s Machado Sons) on the question of repair made to a ship, this Court pointed out that when the object of the expenditure was not for bringing into existence a new asset or to obtain a new advantage, the said expenditure qualifies to be considered as current repairs under Section 31 of the Act. In so holding, after referring to the decision of the Apex Court in the case of CIT vs. M/s Saravana Spinning Mills P.Ltd., reported in (2007) 293 ITR 201, this Court further pointed out to the decision of the Apex Court where it cautioned that all repairs are not current repairs on Section 31(1) of the Act; Section 31(1) of the Act limits the scope of allowability of expenditure as deduction in respect of repairs made to machinery, plant or furniture by restricting it to the concept of "current repairs". Thus, this Court pointed out that what is allowable as revenue expenditure under Section 37 of the Act are those expenditure other than one falling for consideration under Sections 30 to 36 of the Act. The Apex Court further pointed out the example that when the picture tube in a television set is replaced, such repairs would come within the connotation of the phrase "current repairs". Thus, applying these two decisions, we have no hesitation in rejecting the Revenue's appeal. We hold that the claim being considered as current repairs, the same would fall under Section 31 of the Act as current repairs. To that extent, we modify the order of the Tribunal"

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. and plastic goods factories – moulds” as entitled for depreciation only. Meaning thereby that the corresponding fixed asset(s) falls under capital head only. We find no merit in Revenue’s preceding arguments. This is firstly for the reason that the above stated depreciation schedule only talks about the specified items than all kinds of dyes involving metal items. We make it clear that the assessee’s dyes in issue are not made out either of rubber or plastic material. We thus adopt stricter constructions going by hon’ble apex court’s recent landmark judgement in CIT vs Dilip Kumar and Co.. (2018) 9 SCC 1 (FB) (SC) to decline Revenue’s former argument and hold that assessees’ dyes are not covered under the foregoing items in the depreciation schedule. Coupled with this, it has come on record that hon’ble Madras high court’s decision in M/s TVS Motors Ltd. (supra) has already held; after considering all relevant case laws, that such dyes come under revenue head of expenditure than capital only. We therefore see no reason to interfere with the CIT(A)’s findings having correctly appreciated relevant facts / law. No other argument has been advanced before us. All these Revenue’s appeals are dismissed. A copy of this common order be placed in the respective case files. Pronounced in Open Court on 16th July, 2021.

Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: the 16th July, 2021. * gmv

ITA No. 968/Hyd/17, 1374/Hyd/17, 483/Hyd/19 and 678/Hyd/19 M/s Global Aluminium Pvt. Ltd. Copy of the Order forwarded to: 1. (i) Dy.CIT, Circle 2(2), Hyderabad. (ii) ITO, Ward 2(2), Hyderabad 2. M/s Global Aluminium Pvt. Ltd., 5-196/1, Distillery road, Secunderabad 500 003, Telangana. ; 3. ACIT, Range - 2, Hyderabad 4. CIT(A)-2, Hyderabad 5. Pr.CIT-2, Hyderabad 6. DR, ITAT, Hyderabad. 7. Guard File.