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TMI Blog2016 (8) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... it does not include any cement or labour expenditure. AO also did not brought on record that whether the assessee has constructed any new shed. In absence of any finding by the Ld. assessing officer that assessee has extended its already existing building such kind of expenditure cannot be held to be capital in nature. The ratio laid down by the Hon’ble Delhi high court in CIT versus TS TECH SUN India Ltd (2012 (7) TMI 313 - DELHI HIGH COURT) squarely covered the issue in favour of the assessee wherein on the identical facts and circumstances Hon’ble high court has held that no extra capacity or space was created in the factory by repairing the roof and floor and therefore no advantage of enduring nature was obtained by the assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income of the assessee under section 143 (3) of the income tax act at ₹ 120046060/-making various disallowances. Out of the disallowances, the first appellate authority deleted some. On the disallowances sustained by the 1st appellate authority the assessee is in appeal before us on two major additions as mentioned in ground No. 2 and 3 of the appeal of the assessee. 3. Ground No. 1 of the appeal is general in nature, which is also not pressed by the assessee, and therefore it is dismissed. 4. Ground No. 2 of the appeal is against disallowance of ₹ 3 158570/- which according to the assessee is revenue in nature and incurred on repairs and maintenance of building which has been held by the lower authorities as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee company. He further stated that merely based on magnitude of expenses incurred in the previous year in comparison to the current year disallowance could not be made and held that expenditure is capital in nature. He further submitted that looking to the nature of business of the company and this kind of expenditure is required on regular basis to keep the structure in its present condition. He further stated that this kind of expenditure incurred in all types of factories, which are engaged in the kind of activity, and therefore they are not in the nature of exceptional expenditure or unusual expenditure. He submitted that the lower authorities have not appreciated the fact that the assessee has carried out the repair expenditure d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is heated and reshaped by plastic formation. The heating process is used at a temperature of 1100 C. Whole process is a continuous process and impacts building structure on a regular basis. Therefore, to keep it in usable condition the assessee needs to incur repairs and maintenance expenditure on regular basis. This kind of expenditure incurred in all types of factories continuously and they are not exceptional in nature they do not result in to enduring benefit. It is also an admitted fact that no new construction has been done by the assessee. The Main reason for the disallowances by the Ld. assessing officer is that the assessee has incurred expenditure on MS plate s sheets and angles. Merely the assessee has used a particular materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ground No. 3 of the appeals that assessee has incurred an expenditure of ₹ 3 606434/- as repairs to plant and machinery which is held by the Ld. assessing officer as capital expenditure. During the year, assessee has claimed expenditure of ₹ 7368023/- under the head of repairs and maintenance to plant and machinery. During the course of assessment proceedings assessee furnished details of these expenditure out of which Ld. assessing officer has picked up expenditure of ₹ 36060434/- which are pertaining to alloy steel round, miscellaneous assembly items, shapes and sections etc and held that these are capital in nature. Main reason for holding so is that that purchase of shapes and sections are used for the covering and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee are not in the nature of repairs expenditure but are in the nature of Capital Expenditure and the Assessee has got the Benefit of Enduring Nature. 11. We have carefully considered the rival Contentions and perused the Orders of Lower authorities for making and confirming the disallowance. The Assessee submitted the same reason stating that the manufacturing Process of the assessee is a heating process at the very high degree of temperature and therefore this Kind of Process Causes heavy Wear and tear on the Plant and Machinery, Which requires regular repairs to them. Further No New Capital asset which has been created by the assessee was brought on record by the lower authorities in absence of any such finding that what kind of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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