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TMI Blog2015 (10) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... ce expenditure of ₹ 22,400/- is to be treated as capital in nature. - Decided partly in favour of assessee. Treatment of repairs and renewal expenses - revenue v/s capital- Held that:- he first bill referred to by the assessee is dated 02.05.2008 of Mangal Electricals & Refrigeration for ₹ 2,00,000/-. The nature of the expenditure is the repairs of toilet rooms which changes of tiles, painting, water proofing and plumbing. Though the assessee has booked the expenses at ₹ 2,00,000/- but the same comprises of various items under which, the repairs of the toilets by way of changing the tiles and also plumbing in different rooms of the hospital have been carried out. Another expenditure of ₹ 75,628/- has been claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee is against the order of CIT(A), Kolhapur dated 13-12-2012 relating to assessment year 2009-10 against order passed u/s.143(3) of the Income-tax Act. 2. The assessee has raised the following grounds of appeal: 1. The learned Commissioner of Income Tax (Appeals) has disallowed an amount of ₹ 2,50,638/- out of electrical replacement expenses treating the same as capital in nature. The appellant prays that disallowance of ₹ 2,50,638/- out of electrical replacement be deleted. 2. The learned Commissioner of Income Tax (Appeals) has disallowed an amount of ₹ 9,04,085/- out of repairs and renewal expenses treating the same as capital in nature. The appellant prays that disallowance of ₹ 9,04,085/- out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38/- were to be treated as capital gain. 5. The CIT(A) upheld the order of Assessing Officer observing that the nature, purpose and intend of the expenses had to be examined and various expenditure were merely replaced without parts, then the same would be of revenue expenses, but if it replaces the old system ITA No. 642/PN/2013 Govind Shivram Kulkarni 3 substantially to provide enduring benefit to the assessee, then the same was to be considered as capital expenses. 6. The assessee is in appeal before us against the said disallowance of ₹ 2,50,638/-. The learned Authorized Representative for the assessee drew our attention to the list of expenditure booked under the head electrical replacement placed at page 8 of the Paper B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also enlisted the nature of the items which were purchased by the assessee. The photo copies of the bills which are above ₹ 10,000/- have been filed by the assessee. The perusal of the said bills reflects various items being purchased by assessee. One of the major bills is in respect of the items purchased from Mangal Electricals Refrigeration dated 16.05.2008 wherein, the assessee had purchased GI Sheet Metal Duet of measuring 463 sq.ft. for ₹ 50,000/-. Another bill totaling ₹ 18,260/- is in respect of Sommer Cable Quantam 8 Core and Amphenol Connector AC 3 MM and AC 3 FD 2 vide invoice No.138, dated 16.06.2008 from S.U.N. Media Ventures Pvt. Ltd. The perusal of the details in the bills filed by the assessee does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - as capital in nature. The CIT(A) upheld the order of Assessing Officer rejecting the bifurcation filed by the assessee that out of the total expenses, certain expenses were capital expenses and the balance were revenue expenditure. The CIT(A) noted that in the chart, the assessee had classified bore well drilling expenses of ₹ 14,100/- as revenue expenses, but the same were held to be capital expenditure by the CIT(A). 10. The assessee is in appeal against the order of CIT(A). The learned Authorized Representative for the assessee made a reference to the tabulated details filed at pages 22 and 23 of the Paper Book, under which, the nature of expenditure had been explained and also bifurcated between capital and revenue expenses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Dayal Co vide invoice dated 05.06.2008. The assessee had purchased various carpentry items from the said concern for replacing the old items. Where the assessee has carried on repairs of existing items, then the said expenditure is to be allowed as revenue expenditure in the hands of the assessee. In the entirety of the above facts and circumstances, we are of the view that the part of the expenditure claimed by the assessee is revenue in nature i.e. expenditure incurred on replacing of tiles and bath rooms along with water proofing, plumbing work carried out, the carpentry material purchased by the assessee and other hardware items purchased for replacing of the existing items including painting and supervision charges for repair wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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