2009 (10) TMI 19

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..... mining whether particular expenditure was covered by the concept of ‘current repairs’ is well known and though it may, to some extent, over-lap with the parameters applied for determining whether expenditure was revenue or capital with reference to Section 37 of the Act, there may be difference to the extent that even capital expenditure may be covered by ‘current repairs’ in certain situations – order of ITAT sustained. - 201 of 2009(O&M) - - - Dated:- 15-10-2009 - ADARSH KUMAR GOEL and GURDEV SINGH, JJ. Ms. Urvashi Dhugga, Advocate for the appellant. JUDGMENT The judgment of the court was delivered by Adarsh Kumar Goel, J. - This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (in .....

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..... cement, steel and sanitary items etc. We are of the view that otherwise it was the duty of the assessee to construct a building by keeping in view the hygienic conditions since the assessee is a manufacturer of drugs. The learned Assessing Officer has already considered the expenses, which were incurred for the maintenance of existing building and were necessary for upkeeping the building. However, the expenses which were incurred on major repair, are certainly is of the benefit of enduring nature. The learned Assessing Officer has only disallowed the expenses which apparently does not fit into the circumference of current repairs/minor repairs by adopting a practical approach therefore, we upheld the assessment order." 3. We have he .....

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..... 7,15,031/-. The assessee would be entitled to depreciation @ 10%." 7. As against above, the Assessing Officer also after discussing well known judgments, concluded as under:-"In view of above judgments, the entire expenses claimed by the assessee on account of repair and maintenance of building amounting to Rs.34,30,062/- cannot be treated as revenue expenditure. Accordingly, 50% of these expenses which comes to Rs.17,15,031/- are treated as capital expenditure. Since the expenses were incurred on building, depreciation @ 10% is allowed on this expenditure. Accordingly, a disallowance of Rs.15,43,528/- (Rs.17,15,031/- - Rs.1,71,503/-) is made and added to the returned income." 8. Thus, inspite of application of well known tests by t .....

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