Madras HC allows Cast reusage cast iron moulds as revenue exp.

The Hon’ble Madras HC has allowed payment towards Cast reusage cast iron moulds as revenue expense. The Court held as under :

6. The question that is posed before this Court is as to whether in the nature of manufacturing process carried out by the assessee, where the shell life of the cast iron ingot moulds , which is used for about 30 to 40 times and, thereafter, scrapped, could be taken as capital asset or a revenue asset.
7. Considering the nature of manufacturing process, the user of goods, the
period of its shell life and the nature of its use, which is having short shelf life, the appellate authority as well as the Tribunal have held that the goods in question, viz., cast iron ingot moulds are to be treated as revenue expenditure and not as capital expenditure, holding clearly that moulds do not have enduring life, which will be a parameter for considering the same as capital expenditure. The short shelf life of the cast iron ingot moulds , which is to be purchased on regular basis as if it is a part of the stores of spares was treated by the Tribunal as revenue expenditure and not capital expenditure. We find no ground to take a different view from the one taken by the Tribunal, nor counsel for the Revenue is able to point out any proposition of law contrary to the above finding of the Tribunal. Since the issue revolves around pure question of fact, there is no question of law, much less substantial question of law
arising for consideration in these appeals.”

To read complete text of judgement, click here Cast re-usage Cast Iron Moulds-Rev Exp-Madras HC

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