Current repairs deduction for worn-out loom parts allowed where replacement maintained existing machinery without creating a new asset.

Expenditure on replacing worn-out loom parts was treated as allowable as current repairs where the work preserved and maintained the existing machinery without creating a new asset or new advantage. The distinction drawn was between repair and renewal or restoration: repair covers maintenance of an existing asset, while renewal goes beyond that. The word "current" was construed to mean repairs carried out when the need arises, not only minor or frequent repairs, and the commercial expediency of the expense, rather than its quantum or the time elapsed since first use, was the relevant test. On those facts, the replacement remained within current repairs and the deduction was allowed.

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Issues: Whether the expenditure incurred in replacing worn-out parts of looms was allowable as deduction as current repairs under section 10(2)(v) of the Indian Income-tax Act, 1922.

Analysis: The expression "repair" was treated as distinct from renewal or restoration, the governing test being whether the expenditure preserved and maintained an existing asset without bringing into existence a new asset or giving a new advantage. The adjective "current" was held to mean repairs attended to when the need arises and not repairs allowed to accumulate; the proper test was one of commercial expediency, not the quantum of expenditure or the mere lapse of time since the asset was first used. On the facts, the replaced loom parts had become worn out and the expenditure was incurred to maintain the existing machinery, so the fact that the need arose after many years was not against the claim.

Conclusion: The expenditure was allowable as current repairs under section 10(2)(v), and the answer was in the affirmative in favour of the assessee.

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