9911796707
TMI Blog1977 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of the manufacture and sale of woollen cloth. In the accounting year ending on May 31, 1967, relevant to the assessment year 1968-69, the assessee-company incurred and claimed a total expenditure of Rs. 1,90,632 under the head " repairs and replacements ". As a result of scrutiny of the details of the expenses in question, the Income-tax Officer found that a sum of Rs. 1,06,292 represented expenses incurred in connection with the conversion of 20 single shuttle semi-automatic looms into 2 x 1 shuttle box with automatic pirn changing motion with a view to have proper mixing of the weft yarn. The assessee had 36 Japanese made semi-automatic looms out of which 20 were converted into automatic ones. For this purpose, the assessee pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that by the conversion of 20 single shuttle semi-automatic looms into automatic ones, an entirely new asset had been brought into existance. According to the learned counsel, the semi-automatic looms, and after conversion the automatic looms, were two different assets. In support of his contention, the learned counsel drew our attention to Rhodesia Railways Ltd. v. Income-tax Collector Bechuanaland Protectorate [1933] 1 ITR 227 (PC), Humayun Properties Ltd. v. Commissioner of Income-tax [1962] 44 ITR 73 (Cal), Kanpur Agencies Private Ltd. v. Commissioner o Income-tax [1968] 70 ITR 337 (All) and Silver Screen Enterprises v. Commissiomr of Income-tax [1972] 85 ITR 578 (Punj). On the other hand, Mr. Gupta, learned counsel for the assessee, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esult of the expenditure which is claimed as an expenditure for repairs what is really being done is to preserve and maintain an already existing asset. The object of the expenditure is not to bring a new asset into existence, nor is its object the obtaining of a new or fresh advantage. This can be the only definition of ' repairs ' because it is only by reason of this definition of repairs that the expenditure is a revenue expenditure. If the amount spent was for the purpose of bringing into existence a new asset or obtaining a new advantage, then obviously such an expenditure would not be an expenditure of a revenue nature but it would be a capital expenditure, and it is clear that the deduction which the legislature has permitted under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the other findings of fact were wholly irrelevant and of no consequence. We are afraid, we are unable to agree with this submission of the learned counsel. The findings of fact recorded by the Tribunal clearly lead to this conclusion that the expenditure being for current repairs and replacements was incurred by the assessee in the day-to-day course of the carrying on of the business which was commercially expedient and demanded by the necessities of the business. The decision of the Bombay High Court in New Shorrock Spinning and Manufacturing Co.'s case [1956] 30 ITR 338, on which reliance has been placed by the Tribunal, fully applies to the facts of the case in hand. The decisions in Mahalakshmi Textile Mills' case [1967] 66 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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