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TMI Blog2015 (2) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is cogent material available, the Revenue cannot take a different stand or make a valid departure but at the same time, in absence of any such circumstances, namely, any material leading to different conclusion or change in legal position, the consistency on the part of the Revenue should be adhered to. The attempt to contend that life of membrane would be spread over from 3 to 5 years or that the amount involved for replacement of membrane is huge and, therefore, the departure on the part of the Revenue could be said as justified, in our view, cannot be countenance for two reasons. One is that the amount involved would not make difference for chargability of the tax but the nature of expenditure would be relevant for the chargabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the A.Y. 1999-2000, vide order dated 26.03.2002, treated expenditure of ₹ 25,13,20,259/- for replacement of remembraning in membrane Cell-I plant as capital expenditure which was shown by the Assessee in the books of account as revenue expenditure. In Appeal, the C.I.T. (Appeals) confirmed the order of A.O. holding that it would be capital expenditure and not the revenue expenditure. The Tribunal held that for the A.Ys. 1993-1994 and 1995-1996, such expenditure were treated as revenue expenditure by the A.O. himself and there being no material to make departure from the earlier view, rule of consistency should be followed and consequently, the Tribunal allowed the appeal. Under the circumstances, the Revenue has preferred Tax Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue expenditure. 7. Whereas, Mr.Shah, learned counsel appearing for the Assessee contended that the rule of consistency should have been adhered to by the department inasmuch as when it is undisputed position that in the A.Ys. of 1993-1994 and 1995- 1996, the Revenue itself treated such expenditure as revenue expenditure, in absence of any change in the circumstances or any material brought on record, the different view could not have been taken. He also relied upon the decision of the Apex Court in case of Commissioner of Income Tax V/s. Excel Industries Ltd. reported in 358 ITR 295 (SC) for contending that the dual stand on the part of the department is impermissible and is rather titled as flip-flop conduct of the department. He con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent repairs . All repairs are not current repairs. Section 37(1) allows claims for expenditure which are not of capital nature. However, even Section 37(1) excludes those items of expenditure which expressly falls in Sections 30 to 36. The effect is to delimit the scope of allowability of deductions for repairs to the extent provided for in Sections 30 to 36. To decide the applicability of Section 31(i) the test is not whether the expenditure is revenue or capital in nature, which test has been wrongly applied by the High Court, but whether the expenditure is current repairs . The basic test to find out as to what would constitute current repairs is that the expenditure must have been incurred to preserve and maintain an already exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agar Estate (2002) 257 ITR 59 (SC). Union of India V/s. Satish Pannalal Shah (2001) 249 ITR 221 (SC). In the case of CWT V/s. M.K. Gupta (1990) 185 ITR 393 (Delhi). Since in the case under consideration, the AO himself has allowed the claim in the AY 1993- 94, creating the expenditure revenue in nature while no change of facts and circumstances have been pointed out on behalf of the Revenue in the years under consideration, we are of the opinion that the AO is not justified in departing from his previous decision in the AY 1993-94, in the absence of material circumstances or reasons for such departure. Therefore, ground no.4 in the appeal for the AY 1999- 2000 ground no.2 in the AY 2000-01 are allowed. 10. If the observations are f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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