CIT v. Sri Mangayarkarasi Mills (P) Ltd.

315 ITR 114Supreme Court of India2009#2392 most cited

What is CIT v. Sri Mangayarkarasi Mills (P) Ltd. authority for?

Expenditure qualifies as 'current repairs' if it maintains existing machinery without replacement, creates no new asset, restores functional efficiency without increasing capacity, and is not an independent unit. Conversely, the cost of replacing machinery, especially independent units, constitutes capital expenditure.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 367,181 Indian tax judgments — from 2011 to 2025.

Also referred to as

CIT v Sri Mangayarkarasi Mills · 315 ITR 114 · Section 30 Income Tax Act · Section 31 Income Tax Act · Section 37(1) Income Tax Act · current repairs vs capital expenditure · replacement of machinery · tests for current repairs · machinery replacement deduction · business expenditure classification

Sections most often in play

Section 143(3)Section 30Section 31Section 35Section 35ASection 35ESection 37Section 37(1)
Read the full judgment

Judgments citing CIT v. Sri Mangayarkarasi Mills (P) Ltd.

M/S Nagreeka Exports Limited, Kolkata vs. A.D.I.T RG - 6, Kolkata

In the result, both the appeals filed by the assessee and revenue on this issue are dismissed

ITA 455/KOL/2013[2008-2009]Status: DisposedITAT Kolkata03 Aug 2016AY 2008-2009

Bench: Shri N.V.Vasudevan, J.M. &Dr.A.L.Saini, A.M.)

For Appellant: Shri S.D. Verma, AdvocateFor Respondent: Shri G. Mallikarjuna, CIT,DR
Section 143(1)Section 143(3)Section 14ASection 37(1)

…achine would not come within the meaning of the works `current repairs`. He has also relied upon two decisions of the Hon`ble Supreme Court in the case of M/s Saravana Spinning Mills Pvt. Ltd. [2007] 293 ITR 201 and M/s Sri mangayarkarasi Mills (P) Ltd [2009] 315 ITR 114 (SC) which support the view of the Assessing Officer. The Assessing Officer also noted that on the similar set of facts, the Hon`ble ITAT has upheld the action of the assessing officer in treating M/s. Nagreeka Exports Ltd. the expenditure incurred by the assessee as a capital in the assessment year 2005- 06 in the assessee`s own case, and the CI…

Southern Auto Centre, Chennai vs. DCIT, Chennai

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1434/CHNY/2016[2012-13]Status: DisposedITAT Chennai27 Jul 2016AY 2012-13

Bench: Shri Chandra Poojari & Shri Duvvuru Rl Reddyआयकर अपील सं./I.T.A.No.1434/Mds/2016 "नधा"रण वष"/Assessment Year:2012-13 M/S. Southern Auto Centre, The Deputy Commissioner Of 481, Anna Salai, Nandanam, Vs. Income Tax, Chennai 600 035. Non Corporate Circle 2, Chennai. [Pan:Aanfs3162L] (अपीलाथ" /Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से / Appellant By : Shri K. Balasubramanian, Advocate ""यथ" क" ओर से/Respondent By : Shri N. Madhavan, Jcit सुनवाई क" तार"ख/ Date Of Hearing : 16.02.2017 घोषणा क" तार"ख /Date Of Pronouncement : 09.05.2017 आदेश /O R D E R Per Duvvuru Rl Reddy:

For Appellant: Shri K. Balasubramanian, AdvocateFor Respondent: Shri N. Madhavan, JCIT
Section 143(2)Section 143(3)

…nclusion that the expenditure incurred by the assessee for designing and layout as well as other construction materials for making the office functional, the Hon’ble High Court did not accept the decision in the case of CIT v. Sri Mangayarkarasi Mills P. Ltd. 315 ITR 114 (SC) and instead, placing reliance on various decisions of the Hon’ble Jurisdictional High Court itself, held that the expenses are revenue in nature. In the present case, admittedly, as per lease deed, the total period of extension having been provided is for 10 more years w.e.f. 01.08.2008, as detailed herein above. 6.2 Coming to the issue of…

Watertec (India) Private Limited, Coimbatore vs. DCIT, Coimbatore

In the result, the appeal of the assessee is allowed

ITA 134/CHNY/2016[2009-10]Status: DisposedITAT Chennai22 Apr 2016AY 2009-10

Bench: Shri N.R.S. Ganesan & Shri A. Mohan Alankamonyआयकर अपील सं./Ita No. 134/Mds/2016 "नधा"रण वष" / Assessment Year : 2009-10 M/S Watertec (India) Pvt. Ltd., The Deputy Commissioner Of (Formerly Watertec Systems V. Income Tax, (India) Private Limited), Corporate Circle – 1, Gopal Bagh, 1060, Avinashi Road, Coimbatore. Coimbatore – 641 018. Pan : Aaacw 1645 G (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Sh. R. Vijayaraghavan, AdvocateFor Respondent: Sh. A.B. Koli, JCIT
Section 148Section 31

…e Assessing Officer reopened the assessment after issuing notice under Section 148 of the Act. According to the Ld. D.R., replacement of molds in (2007) 293 ITR 201. A similar view was taken by the Apex Court in CIT v. Sri Mangayarkarasi Mills P. Ltd. (2009) 315 ITR 114. According to the Ld. D.R., the basic test is whether the expenditure was incurred to preserve and maintain an already existing plant and machinery. In this case, according to the Ld. D.R., it is not a repair of the machinery, it is a replacement of molds, therefore, the replacement of molds amount to enduring advantage to the business of the a…

Chennai Petroleum Corpn. Ltd., Chennai vs. DCIT, Chennai

In the result, the appeal of the assessee is partly allowed

ITA 720/CHNY/2015[2008-09]Status: DisposedITAT Chennai26 Feb 2016AY 2008-09

Bench: Shri Chandra Poojari & Shri G. Pavan Kumar

For Appellant: Shri. R. Vijayaraghavan, AdvocateFor Respondent: Shri. M.N. Maurya, IRS, CIT
Section 143Section 143(2)Section 143(3)Section 148Section 619(3)(b)

…ing / premises because the existing barbed wire fencing is neither a building / premise. It is to be noted that the case law quoted by the Income tax Department in the Supreme court case - ITA No. 720/Mds/2015. :- 6 -: CIT v. Mangayarkarasi Mills (P) Ltd - 315 ITR 114 is related to replacement of ring frame in the existing textile machinery and hence it is covered u/s 31 of the Income tax Act which relates to repairs to Plant & Machinery. CPCL has claimed the replacement of fencing as revenue expenditure u/s 37(1) of the Income tax Act, wherein, any expenditure not being in the nature of capital expenditure ex…

Maharashtra State Film, State & Cultural Development Corporation Ltd, Mumbai vs. ACIT 11(1), Mumbai

In the result, the appeal filed by the assessee is treated as allowed

ITA 8604/MUM/2011[2008-09]Status: DisposedITAT Mumbai06 Jan 2016AY 2008-09

Bench: S/Shri B.R.Baskaran, Am & Amarjit Singh, Jm आमकय अऩीर सं./I.T.A. No.8604/Mum/2011 (ननधधायण वषा / Assessment Year:2008-09) M/S Maharashtra State Film बनाम/ Asstt. Commissioner Of Income Stage & Cultural Development Tax 11(1), Vs. Corporation Limited, Aayakar Bhavan, Dadasaheb Phalke Chitranagari, Mumbai. Goregaon (E), Mumbai-400065 (अऩीरधथी /Appellant) (प्रत्मथी / Respondent) ..

Section 11Section 43BSection 4A

…he expenditure incurred by the assessee has given benefit of enduring nature and hence the ld. CIT(A) has confirmed the view taken by the AO by following the decisions rendered by the Hon‟ble Supreme Court in the cases of Shri Mangayarkarsasi Milll P Ltd V/s (315 ITR 114 (SC) and Ballimal Naval Kishore and Another (224 ITR 414 (SC). 18. We have heard the rival contentions and perused the record. We notice that the assessee is holding an area of 512 acres of land and it is submitted that there is huge stretch of road therein. We notice that the assessing officer has not brought any material to show that the asses…

Commissioner of Income Tax –II vs. Modi Rubber Ltd

The appeal is disposed of in the above terms but in the facts and

ITA/259/2014HC Delhi04 Aug 2015
Section 143Section 260ASection 43Section 43B

…or capital is not the proper test.” It was held that the replacement of a ring by a new one did not amount to „current repairs‟. 22. The issue was re-visited by the Supreme Court in Commissioner in Income Tax v. Sri Mangayarkarasi Mills (P) Ltd. (2009) 315 ITR 114 (SC). There the question was whether the expenditure incurred by the Assessee, which was engaged in the manufacture and sale of cotton yarn, on replacement of machinery was the revenue expenditure. On the facts of the case, and applying the tests enunciated in CIT v. Saravana Spg. Mills (P) Limited (supra), the claim of the Assessee was nega…

Surinder Madan

The appeal is dismissed

ITA/364/2013HC Delhi22 Aug 2013
Section 260ASection 30

…Whether expenditure qualifies as “current repairs” depends upon several factors like nature of expenditure, nature of business activity, the asset subject matter of “repair” etc. 9. The Supreme Court in CIT vs. Sri Mangayakarasi Mills P. Ltd. (2009) 315 ITR 114 (SC), on the question whether the expenditure is „current repairs‟ had expounded that the following tests which should be taken into consideration: “(i) It is a case of maintaining and preserving the machine. (ii) It is not a case of replacement. (iii) It does not create any new asset. (iv) It only restores the functional efficiency by…

M/s. Bharat Gears Limited vs. Commissioner of Income-Tax, Central I

ITA-14/2005HC Delhi30 Jun 2011

…ng to him, the following aspects which were vehemently put forth and highlighted made the expenditure in question revenue in nature having regard to the latest judgment of the Supreme Court in the case of CIT vs. Sri Mangayarkarsai Mills Pvt. Ltd., [2009] 315 ITR 114 (SC):- i. It is a case of maintaining and preserving the machine. ii. It is not a case of replacement. iii. It does not create any new asset. 2011:DHC:3209-DB ITA Nos.14/2005 & 1600, 1670/2010 Page 7 of 25 iv. It only restores the functional efficiency by removi…