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TMI Blog1975 (4) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ed into an agreement. The assessee wanted to make some alterations and improvements in the shop. The landlord permitted him to do so and increased the rent to Rs. 150 per month with effect from 1st August, 1963. The assessee obtained the necessary permission from the Municipal Board and carried out the additions and alterations during the accounting years relevant for the assessment years under consideration. The expenditure incurred in this behalf was as under : Assessment year Expenditure Rs. 1964-65 10,859.00 1965-66 9,865.00 1966-67 1,000.00 The assessee claimed these amounts as deduction from its income as being expenditure incurred on current repairs. The claim was disallowed by the Income-tax Officer. His appeal to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se (a)(i) where the premises are occupied by the assessee as a tenant, the rent paid for such premises and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs, may be allowed. Clause (ii) then provides that where the premises are occupied by the assessee otherwise than as a tenant, the amount paid by him on account of current repairs for the premises may be allowed. It would be immediately noticed that under clause (ii) only current repairs are to be allowed, if the premises are not occupied by the assessee as a tenant. But, in case the premises are occupied by him as a tenant, then he has to be allowed the repairs of the premises, if he has undertaken to bear the cost of repa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or determining whether a particular item of expenditure constitutes revenue or capital disbursement. But they must be applied with proper regard to the facts of each case, because as the House of Lords reaffirmed in Strick v. Regent Oil Co. Ltd., no one test or principle or criterion is paramount or conclusive or of universal application. The first and the most commonly applied test is to see whether the expenditure brings into existence an asset or advantage of enduring nature. When a person constructs or purchases a building, he acquires an asset and the expenditure on such acquisition or construction would be a capital expenditure. Similarly, when he incurs expenditure on addition or alteration in a building which enhances its value, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant case is not that the assessee has made any addition to the shop. The finding on the other hand is that the assessee might have made some structural changes inside the shop. In my opinion such structural changes also do not create a capital asset or bring into existence an advantage of enduring nature. The assessee must have made structural changes to make the shop more useful for purposes of its business. There is no finding that the lease in favour of the assessee was a perpetual lease so that the advantage acquired by him by structural changes could be said to be of enduring nature. A large number of cases have been cited, but in my opinion none of them is to the point. The case which is nearest to the case of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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