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TMI Blog2017 (3) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that the expenditure aggregating Rs. 60,09,212 incurred under various heads was of capital in nature and was not admissible as business expenditure ? 2. Whether the Tribunal was legally correct in reversing the order of the first appellate authority in the matter of admissibility of sums aggregating Rs. 60,09,212 as revenue expenditure, without there being any material contrary to the findings recorded by the first appellate authority brought on record by the Revenue ? 3. Whether the view taken by the Tribunal is not vitiated as being inconsistent with the material and information on record and law applicable thereto ? 4. Whether the order of the Tribunal disallowing the assessee's claim for deduction of expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax ignores completely is that two old floors of the hotel received renovation in the bath rooms which included the replacement of old fittings into new fittings which has the effect of upgrading the hotel and such an upgradation would definitely not qualify as current repairs or running repairs. 5. The very nature of expenditure does not suggest that the expenses made by the assessee were in the nature of the usual kind of running repairs or current repairs. It was not the mere replacement of a single faucet or a tube but the entire systems and fittings in the bath rooms were changed. 6. The Tribunal records a finding that by making such expenditure, the assessee had renovated and refurnished its hotel which enhanced the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;whether the expenditure is incurred to 'pre serve and maintain' an already existing asset and not to bring a new asset into existence or to obtain a new advantage. For 'current repairs' determination, whether expenditure is 'revenue or capital is not the proper test'. It is our opinion that the entire textile mill machinery can not be regarded as a single asset, replacement of parts of which can be considered to be for mere purpose of 'preserving or maintaining' this asset. All machines put together constitute the production process and each separate machine is an independent entity. Replacement of such an old machine with a new one would constitute the bringing into existence of a new asset in place of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... best amount to a repair made to the process of manufacture of yarn. Further this court has also observed in Saravana Mills (supra) case that if replace ment was held to be 'current repair' in such cases, section 31(i) will be completely redundant and absurdity will creep in because repair implies existence of a part of the machine which has malfunctioned, which is impossible in the case of such replacement. Thus, this replacement expenditure cannot be said to be 'current repairs' after the decision in the Saravana Mills (supra) case. We are of the opinion that the expenditure of the assessee in this case is capital in nature and there is sufficient judicial precedent to support this view. In the case of Travancore-Cochin C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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