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Issues:
Whether the repairs claimed by the assessee qualify as "current repairs" under section 30(a)(ii) of the Income-tax Act, 1961. Detailed Analysis: The case involved a public limited company that claimed deductions for repairs to its factory under section 30(a)(ii) of the Income-tax Act, 1961. The Income-tax Officer disallowed the entire claim, leading to an appeal by the assessee. The Appellate Assistant Commissioner partially allowed the appeal but rejected a portion of the claim, stating that certain repairs were of a capital nature. The assessee then filed a revision with the Commissioner of Income-tax, who disallowed a specific amount spent on cement sheets for roof replacement. The assessee challenged this decision in the High Court under article 226 of the Constitution. The main contention was whether the repairs constituted "current repairs" as required by the law. The court considered various precedents and legal principles to determine the nature of current repairs. It was established that current repairs are necessary for maintenance and should not create an enduring asset. The court emphasized that the need for repairs must arise periodically, and the repairs should not result in a substantial change to the asset. The court also highlighted the commercial expediency test to determine when repairs are necessary. In analyzing the specific repairs claimed by the assessee, the court found that the replacement of old cement sheets with new ones was not a capital asset but was done to preserve and maintain the existing asset. The court cited a Supreme Court case where the replacement of worn-out parts did not create a new asset, supporting the assessee's claim for deduction. The court concluded that the repairs in question were indeed "current repairs" and allowed the deduction of the disallowed amount. Ultimately, the court set aside the previous judgment, allowing the writ appeal in favor of the assessee. No costs were awarded, and the advocate's fee was specified. The judgment provided a detailed analysis of the legal principles surrounding current repairs under the Income-tax Act, supporting the assessee's claim for deductions based on the nature of the repairs conducted.
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