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TMI Blog2008 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,03,835/- towards renovation of rented premises under Section 30(a)(i) of the Income Tax Act, 1961 and in holding that the Assessing Officer had wrongly disallowed the same on the ground that the same was allowable as a deduction towards depreciation under Section 32 of the said Act"? 3. The counsel for the parties agreed that no paper books would be necessary and that this appeal be heard straight away. 4. The facts of the case are that the assessee had claimed the aforesaid expenditure of Rs.14,03,835/- as a deduction under Section 30(a)(i) of the said Act. The expenditure was in respect of tenanted premises which had been taken by the assessee on lease for the purposes of its business. The expenditure was towards false ceiling, fixing tiles, replacing glasses, wooden partitions, replacement of electric wiring, earthing, replacement of GI pipes etc. As per the assessee since the premises were not in use for a long time, the assessee was required to make these expenditures to make the premises usable for the purposes of its business. The assessee's contention was that these expenses were not incurred for creating any new asset but for making the premises usable for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ND INSURANCE OF MACHINERY, PLANT AND FURNITURE. In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deductions shall be allowed - (i) The amount paid on account of current repairs thereto; (ii) xxxxx xxxxxxx xxxxxx xxxxxx xxxxxx." 9. It is apparent that the provision pertains to repairs and insurance of machinery, plant or furniture used for the purposes of business or profession and by virtue of Section 31(i) a deduction is allowed for the amount paid on account of "current repairs" thereto. The Supreme Court decision is immediately distinguishable in as much as in the present case we are not concerned with the expression "current repairs" but only with the expression "repairs" as appearing in Section 30 and, particularly, in Section 30 (a) (i) which relates to repairs to premises undertaken by a tenant. The expression "current repairs" appearing in Section 30 (a) (ii) relates to repairs undertaken by a person other than a tenant. The distinction between "current repairs" and "repairs" is borne out by the provision itself and would be apparent upon a plain reading of Section 30 :- "Section 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "current repairs" is not under consideration in the present case, whereas before the Supreme Court it was that very expression which was considered. Moreover, in the present case the replacement was not of the premises but of certain "parts" such as the internal wires and GI Pipes. The analogy of replacement of the entire machine is, therefore, not applicable to the facts of the present case. 12. The learned counsel for the revenue also placed reliance on the Supreme Court decision in Ballimal Naval Kishore and Another v. Commissioner of Income Tax: 224 ITR 414. This decision is also noted in Saravana Spinning Mills P.Ltd. (supra). The decision in Ballimal Naval Kishore approved the test formulated by Chagla, CJ in the case of New Shorrock Spinning and Manufacturing Co. Ltd. v. CIT : (1956) 30 ITR 338 (Bombay) as to when could an expenditure be said to have been incurred on "current repairs". In New Shorrock Spinning and Manufacturing Co. Ltd. (supra), it was observed that the expression "current repairs" means expenditure on buildings, machinery, plant or furniture which is not for the purpose of renewal or restoration but which is only for the purpose of preserving or maintaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had only obtained an advantage in a commercial sense by re-designing the premises and providing better fittings, better material and marble flooring. The advantage obtained by the assessee was for the purposes of the business of the assessee and not for the acquisition of a capital asset. The Court also observed that the legislature had used different language in the provisions of Section 30(a)(i) and 30(a)(ii). It observed that a tenant is entitled to the deduction of the amount spent on account of the cost of the repairs to the premises when he has undertaken to bear the cost of the repairs. If the amount is spent by the assessee, otherwise than as a tenant, the amount paid by him on account of only "current repairs" would be allowable. It was further observed that the latter provision applies to the assessee occupying the premises otherwise than as a tenant, as an owner or mortgagee in possession, and in those cases the deduction is restricted in respect of the "current repairs" to the premises. So far as a tenant was concerned, it was held that the "repairs" to the premises would be allowable expenditure. 16. After having considered the arguments advanced by the learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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