1951 (12) TMI 11

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..... re and the assessee was not entitled to claim a deduction for it out of his income. With regard to the re-roofing of thirty-four quarters with new khaprails a point was raised that this was current repairs and was not capital expenditure. The question referred to us by the Tribunal is as follows:- Whether in the circumstances of the case, the expenditure incurred in the replacement of the old roofs by using new khaprail in place of old ones is an item of capital expenditure or a revenue expenditure under Section 10 (2) (xv) of the Income-tax Act? Clause (xv) of the said Act is as follows:- Any expenditure not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and e .....

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..... rose whether that was a capital expenditure, or a revenue expenditure, it being admitted that the repair to the track brought it back to its normal condition and the line was not capable of giving more service than the original line. Their Lordships held that the expenditure was not a capital expenditure and it is on this part of the decision that reliance is being placed and it is urged that the roofs of thirty-four quarters only were changed by new roofs and not of all the quarters nor were the quarters rebuilt from the foundation. The basis of their Lordships' decision in the case is given at page 232 where their Lordships said:- The expenditure here in question was incurred in consequence of the rails having been worn out in ea .....

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..... e case. The assessee was clearly entitled to depreciation under clause (vi) of Section 10 (2) and we presume he must have been allowed the depreciation permissible under that clause. In any case it was for the assessee, if he was not getting the normal depreciation, to have insisted on that fact being brought out in the statement of the case. The re-roofing of the thirty-four quarters with new tiles must have enhanced their value and added to the capital assets of the company. Depreciation is payable at different rates according to the nature of the building and in the case of Jchaprails depreciation is payable at a higher rate. After a certain number of years, therefore, the value of the property so depreciates that it becomes almost nil a .....

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