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TMI Blog2017 (12) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... xamining the facts on records and relevant contentions, we find that the expenditure is clearly of revenue in nature as the same were incurred to repair and restore the dilapidated wall. Moreover, the case of the assessee finds support of the decision of the Hon’ble Madras High Court in the case of Southern Roadways Ltd (2007 (6) TMI 193 - MADRAS HIGH COURT), wherein it has been held that the expenditure incurred on compound wall is revenue expenditure - Decided in favour of assessee Disallowance u/s 40(a)(ia) - non deduction of tds on payment made to Saikrupa Food Services Private Limited (SKFS) - Held that:- No disallowance is called for as the recipient has already paid the taxes on the sources of income and due certificate was furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was broken at several places and also stated that the said wall was constructed long back some where in the year 1974-75 and was damaged due to movement of trailers, forklifts and therefore the surface of the plot has to be repaired. However, the AO was not satisfied with the reply of the assessee and added the same to the income of the assessee however allowed the depreciation at the rate of 10% resulting into disallowance of ₹ 1,45,20,421/- . In the appellate proceedings, the FAA confirmed the action of the AO vide para 8 of the appellate order which is as under : 8. The facts of the case, the grounds of appeal, the stand taken by the A0 in the assessment order and the written submissions filed by the appellant have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant that the expenditure amounting to Rs.l,61,33,801/- ought to have been allowed as revenue expenditure is devoid of merit. In similar facts and circumstances, the Hon'ble Courts have held as under: ( i) Arvind Mills Ltd. vs. CIT (197 ITR 422) (SC) wherein the Hon'ble Supreme Court has held that capital expenditure would not become revenue expenditure simply by reason that it was incurred in connection with business activities which ultimately resulted in efficiently carrying day to day business. ( ii) . Modells Woolens Ltd. vs. CIT (120 ITR 726) (Bom.) wherein the Hon'ble High Court has held that the expenditure incurred for converting a kacha road into pucca road was not deductible as revenue expenditure b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the same be treated as revenue expenditure and accordingly prayed that the order of FAA be reversed and the AO be directed to delete the addition. 5. We have carefully heard the rival contentions and perused the material placed before us including the impugned orders and case law relied upon by the assessee. The undisputed facts of the issue are that the assessee has incurred an expenditure to the tune of ₹ 1,61,33,801/- on the repairs of compound wall which comprises payment for cost of bricks, cement steel, TMT bars , excavation and labour charges etc. Now the issue before us is whether the repair of compound wall constitutes revenue expenses in nature or falls under the category of capital expenditure. After examining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in (2015) 377 ITR 635(Del) and stated that the Hon ble Delhi High Court has decided the issue in favour of the assessee and the same analogy be applied for in this case also. 7. The ld. DR on the other hand relied on the order of authorities below. 8. We find that no disallowance is called for as the recipient has already paid the taxes on the sources of income and due certificate was furnished by the assessee. We also find that the case law relied upon by the ld. AR in the case of Ansal Land Mark Township P Ltd (supra) support the issue of the assessee. In view of the facts and legal position, we are inclined to set aside the order of CIT(A) and direct the AO to delete the disallowance. The ground of the assessee is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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