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TMI Blog2000 (2) TMI 844X X X X Extracts X X X X X X X X Extracts X X X X ..... columns, demolition of old walls as revenue expenditure, without appreciating the facts and the circumstances on which the findings of Assessing Officer in the assessment order treating the said huge amount of repairs as capital expenditure was based and is well supported in the decided cases of M/s. Humayun Property Ltd. v. CIT [1962] 44 ITR 73 (Cal.). 3. The assessee-firm is a tenant of a property belonging to M/s. Bombay Cotton Mills Estate (P.) Ltd. at Kalachowki, Bombay. The total built-up area in the possession of the assessee was 5,200 sq. ft. It was being used for carrying on the warehousing business of the assessee. The premises were owned and in the year of account relevant for the assessment year 1988-89, the assessee incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely. (c) ₹ 1,00,000 Approximately. (d) ₹ 75,000 Approximately. ₹ 7,86,000 Approximately. The details of the work done are contained in the scope of work. (page 15 of the Compilation). The major portion of the work was done by Vishal Construction Co. The total cost of the work was ₹ 7,85,866. This was accordingly written off in the accounts as Repairs and Maintenance. The further details said to have been enclosed with the compilation filed before the CIT (Appeals) and placed at page 15 have not been filed before us. 4. A copy of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ft. From any standard, this payment is as good as constructing a new building. For earning ₹ 192 (16 12) assessee will not spend ₹ 262 for repairs and maintenance. From any standard, payment to contractor is a capital expenditure which is in the nature of investment for enduring benefits. Assessee has received substantial gain in his rental income. From ₹ 18,000 annual rental income, assessee will be receiving ₹ 5,76,000 annual rental income in future. It clearly shows that the renovation is in the nature of enduring benefit. Hence, I disallow the sum of ₹ 7,85,866 debited as repair and maintenance in the P L Account and consider the same as a capital expenditure. The CIT (Appeals), however, allowed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned counsel for the assessee on the other hand mentioned that the expenditure is only of the nature of repairs and not of renovation and that it has to be allowed as a revenue deduction in view of the ratio of the following decisions :- (1) Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 11 (SC); (2) CIT v. Chowgule Co. (P.) Ltd. [1995] 214 ITR 5232 (Bom.); (3) Standard Mills Co. Ltd. v. CIT [1990] 181 ITR 233 (Bom.); (4) CIT v. Oxford University Press [1977] 108 ITR 166 (Bom.); (5) Dewar s Garage (India) (P.) Ltd. s (supra); (6) CIT v. Bharat Suryodaya Mills Co. Ltd. [1993] 202 ITR 942 (Guj.); (7) CIT v. Cominco Binani Zinc Ltd. [1993] 204 ITR 56 (Cal.); (8) CIT v. N.P. Singh [1994] 207 ITR 183 (Pat.); (9) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re premises of 5,200 sq. ft. held by the assessee. At our instance, the learned counsel for the assessee has also filed a statement of the income received on letting out of the premises for warehouse purposes in the earlier four years. The details are as follows :- Financial Year Income 1983-84 ₹ 66,000 1984-85 ₹ 43,000 1985-86 ₹ 18,000 1986-87 ₹ 18,000. He has also filed copies of the profit and loss account of the assessee for the above four years and we find that the total expenditure debited i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier years as observed by the Assessing Officer. New walls were erected after the demolition of the existing walls. New roof was put up and toilets etc., were furnished and even the existing columns were reinforced for support. We cannot ignore the substantial spurt in the expenditure in the year. We are of the view that the decisions cited by the learned counsel for the assessee are all distinguishable, inclusive of the decision of the Hon ble Calcutta High Court in the case of Dewar s Garage (India) (P.) Ltd. (supra). In this case, the Municipal Corporation gave a notice for demolition and so the lessee had to incur the expenditure and there is also a finding that the expenditure is in the nature of repairs. There is no such statutory nec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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