Repairs, Rent & Insurance of Furniture and Plant & Machinery - Section 31

Supreme Court clarifies Section 31: Replacement of machinery is capitalized; worn-out parts deductible; logo expenses under Section 37.

Section 31 of the Income Tax Act allows deductions for revenue expenses on repairs and insurance premiums for plant, machinery, and furniture used in business. Capital expenditures on repairs are added to the asset's cost. The Supreme Court ruled that replacing old machinery with new is not a deductible revenue expense but is subject to depreciation. Replacement of worn-out parts is deductible, while parts of composite machinery with a long life are capitalized. Expenses on abandoned projects, like creating a company logo without forming a new asset, are treated as revenue expenses under Section 37.