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TMI Blog2016 (7) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year 2008-09. 2. Sole issue raised by Revenue is as regards that Ld. CIT(A) erred in deleting the disallowance of claim for the expenditure on account of major repairs & maintenance for Rs. 247.63 lacs. For this, Revenue has raised the effective ground:- "1. That on the facts and circumstances of the fact that Ld. CIT(A) erred in law in directing the AO to allow the expenditure of Rs. 247.63 lakh incurred on account of major repairs and maintenance without appreciating the fact that the expenditure is capital in nature and the assessee company will get the enduring benefit from the said expenditure for a number of years to come." 3. Brief facts of the case as culled out from the records are that the assessee is a Private Limited C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appeal No.200/CIT(A)-IV/2009-10 dated 29.06.2011 has held that the entire expenditure was revenue in nature and thereby allowable. As the facts and circumstances of the previous year are similar to that of A.Y 2007-08, I am of the view that the expenses under the head 'Major Repair & Maintenance' for an amount of Rs. 247.63 lacs are allowable as revenue expenses." Being aggrieved by this order of Ld. CIT(A) Revenue is in appeal before us. Shri Soumitra Chowdhury Ld. Authorized Representative appearing on behalf of assessee and Shri Debasish Roy, Ld. Departmental Representative appearing on behalf of Revenue. 5. We have heard rival submissions of both the parties and perused the materials available on record. Before us Ld. DR fairly rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that due to unsatisfactory financial position of the company for few years in the past, it could not undertake the repair and maintenance of plant and machinery and its capacity utilization was in the range of 37.46% against the industry average of 90. According to him, to make the situation improve, the assessee company in FY 2006-07 relevant to AY 2007-08 undertook the overdue repairs and maintenance for plant and machinery and repair and replacement of internal control purpose was started. The assessee company has not increased in the rated capacity of any of the plant/equipment by virtue of this repair and maintenance. Factually, the assessee has carried out repairs and maintenance, as is evident from the above discussion. In similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o restricting the allowance to expenditure incurred for preservation and maintenance thereof in its current state in contradiction to that incurred on any improvement or an addition thereto [CIT v. Chowgule & Co. Pvt. Ltd., (1995) 125 CTR (Bom) 442, 448 = (1995) 214 ITR 523 (Bom) In the facts of that case, the Tribunal, on investigation of the nature of the repairs undertaken by the assessee, recorded a categorical finding of fact that it did not result in emergence of a new ship but amounted, in substance, to current repairs to the existing ship. The fact that old parts of the ship were replaced by new parts was not relevant for determining whether the expenditure was on 'current repairs' or not. Therefore, the expenditure claimed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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