9911796707
TMI Blog1984 (10) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses were not vouched. He was further of the opinion that there were new constructions and additions to the building. He rejected the assessee's explanation that the expenditure related to upkeep of the building in accordance with the requirements of the licensing authority. He finally treated Rs. 10,000 in the asst. yr. 1971-72, Rs. 7,000 in the asst. yr. 1972-73 and Rs. 8,000 in the asst. yr. 1973-74 as capital expenditure. He does not seem to have made any other disallowance. 3. The assessee appealed to the AAC. The AAC did not examine the nature of the expenses as such. He found that the written down value of the entire building was only Rs. 49,302. According to him, the expenses of Rs. 38,000 claimed in the above three year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted by him in this year also. 6. In the asst. yr. 1973-74, the assessee claimed to have spent a sum of Rs. 24,915 towards repairs of machinery. The details of the expenses was also given to the ITO. The ITO observed that in the first place, the second were not totally vouched and in the second place, they did not relate to petty repairs but to the installing of new instruments, iron chairs and additions to the building. He finally treated a sum of Rs. 15,000 as capital expenditure. 7. The AAC found that the value of the machinery was only RS. 5,125. In his opinion, therefore, incurring of an expenditure of Rs. 24,915 could not by any stretch of imagination, be classified as current repairs. He therefore, confirmed the addition of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the economies of the working or academic and theoretical consideration. The word "current" also does not mean "petty", nor "current repairs" mean "petty repairs". Heavy expenditure may have to be incurred in effecting current repairs. The magnitude of the amount expended is not the criterion. The real test is whether the asset is merely maintained or is replaced or improved by the expenditure incurred. The periodicity and the necessity are the two elements implicit in the expression "current repairs". Everything would depend upon the nature of the repairs and the facts of each case. 11. The AAC has merely gone by the quantum of the expenditure to hold that they were capital in nature. His finding cannot be upheld in view of the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
