Current repair rule: cable replacement treated as substantial renewal and disallowed; partners' boarding and lodging not deductible.

The note addresses deductibility under the Income-tax Act of (i) cable replacement costs and (ii) partners' boarding and lodging on business tours. It applies the 'current repair' concept, holding that deductible repairs are petty or periodic renewals of subsidiary parts; replacing roughly one-third of cable value amounts to substantial renewal, not a current repair, so the expenditure is disallowed. It also applies the 'wholly and exclusively for business' test, finding partners' boarding and lodging contain personal sustenance elements and are not shown to be wholly business-related, so those expenses are disallowed.

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Issues: (i) Whether the expenditure of Rs. 1,554 on replacement of cables of the flour mill plant constituted a current repair deductible under Section 10(2)(v) of the Income-tax Act, 1922; (ii) Whether Rs. 500 spent on boarding and lodging of partners during business tours was allowable as expenditure wholly and exclusively for the purpose of the business under Section 10(2)(vii) of the Income-tax Act, 1922.

Issue (i): Whether the expenditure of Rs. 1,554 on replacement of cables amounted to a current repair deductible under Section 10(2)(v) of the Income-tax Act, 1922.

Analysis: The concept of repair qualified by the word "current" limits deductibility to petty or periodic repairs, typically involving renewal or replacement of subsidiary parts that are frequently worn out. Renewal distinguished from reconstruction or substantial renewal of the entirety. Considerations include the nature of the work, proportion of the whole replaced, and whether the expenditure was of a large sum indicative of substantial renewal rather than current repair. Here the total value of cables was Rs. 4,537 and the replacement cost Rs. 1,554, suggesting roughly one third was replaced, indicating more than a petty periodic repair.

Conclusion: The expenditure of Rs. 1,554 was not a current repair deductible under Section 10(2)(v) of the Income-tax Act, 1922; deduction disallowed.

Issue (ii): Whether Rs. 500 spent on boarding and lodging of partners during business tours was allowable as wholly and exclusively for business under Section 10(2)(vii) of the Income-tax Act, 1922.

Analysis: The statutory test requires expenditure to be laid out wholly and exclusively for the purpose of the business. Boarding and lodging expenses of partners, even when incurred away from headquarters on business trips, include elements of personal sustenance and comfort that would be incurred in some measure irrespective of travel. Such expenses are not shown to be incurred wholly and exclusively for business purpose.

Conclusion: The Rs. 500 spent on boarding and lodging of partners is not allowable under Section 10(2)(vii) of the Income-tax Act, 1922; deduction disallowed.

Final Conclusion: The Court answers the referred questions by holding that the cable replacement expenditure and partners' boarding and lodging expenses are not deductible under the specified provisions; questions of fact regarding commencement of manufacture and determinability of manufacturing loss do not raise points of law for decision.

Ratio Decidendi: "Current repair" under Section 10(2)(v) denotes petty or periodic restoration by renewal or replacement of subsidiary parts, not substantial reconstruction, and expenses must be shown to be incurred wholly and exclusively for business under Section 10(2)(vii) to be deductible.

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