Revenue nature of furnace repair expenditure confirmed as deductible for surtax computation on identical facts.

Expenditure on furnace repairs was treated as revenue in nature and therefore deductible in computing surtax liability. The court followed an earlier Division Bench decision involving the same assessee and assessment year, where the same repair expenditure had already been held deductible on identical facts. Applying that prior ruling, it confirmed that the full amount incurred on repairs of furnaces remained allowable as a deduction for surtax purposes.

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Issues: Whether the expenditure of Rs. 5,02,654 incurred on repairs of furnaces was revenue expenditure deductible in computing surtax liability.

Analysis: The question was governed by an earlier Division Bench decision concerning the same assessee and the same assessment year, where the expenditure on furnace repairs had already been held to be revenue expenditure and therefore deductible. Following that , the Court held that the expenditure was obviously revenue in nature and remained deductible for surtax purposes as well.

Conclusion: The Tribunal was correct in law in holding that the entire amount of Rs. 5,02,654 was deductible for computing surtax liability.

Ratio Decidendi: Expenditure on repairs, when held on the same facts to be revenue in nature, is deductible in computing surtax liability.

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