1978 (10) TMI 83

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....see was permitted to sub-let the premises. The assessee claimed that at the time of the lease the property was in disrepair and therefore the assessee incurred an expenditure of Rs. 29,731 for repairing the building. Afterwards the assessee leased the property to one Mr. Balakrishna Kathare, who was the Director of India Chemicals Agencies Pvt. Ltd., for a monthly rent of Rs. 1,000. It was further submitted that for effecting the above repairs the firm had borrowed Rs. 19,000 form India Chemicals Agencies Pvt. Ltd. Which was recoverable from the lease amount payable to the assessee. The assessee's claim before the ITOr was contained in the letter dated 11th Feb., 1976 submitted before the ITOr. It was followed up by another letter dated 16t....

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.... further pointed out that even if the expenditure could be considered as capital, the repairs would fall under 'current repairs' under s. 30 of the Act and the same should have been allowed. He also drew our attention to the fact that the expenditure claimed in regard to electric installations and other items would clearly show that the same was incurred only by way of repair and not by way of construction of additional building. It was further pointed out that the premises were near the railway line and due to the constant rail-traffic and the consequent vibration the walls required support and a part of the expenditure was incurred for the purpose. He relied upon the ruling of the Allahabad High Court in the case of Girdhari Dass and Sons....

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....before. The assessee had furnished the following the ITO. For electrical materials from Ratna Electricals(Wire PVC conduits, switches, metres, etc.) Rs. 2,712-83 Labour for white washing portions paints remuneration to K. Srinivasan Rs. 778-94 Carpentary labour Rs. 130-00 Electricity connection charges & minimum charges paid to Electricity Board Rs. 3,802-90 Construction of brick masonary walls in partition and for strengthening Rs. 9,914-00 Replacing damaged portions Rs. 3,718-00 Resetting sunshades, fol slabs, beam Rs. 1,089-00 Replacing grill gates with roller shutters Rs. 1,000-00 Construction of bigger overhead tank and repairing of sanitary and water supply constructions Rs. 4,386-....

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.... Dass and Sons vs. CIT(1), cited by the learned counsel for the assessee clearly supports the assessee's stand. Their Lordships have laid down the test to be applied to find out whether an asset or advantage of enduring nature has come into existence at page 342 as under: "The first and the most commonly applied test is to see whether the expenditure brings into existence asset or advantage of enduring nature. When a person constructs or purchases a building, he acquired an asset and the expenditure on such acquisition or construction would be a capital expenditure. Similarly when he incurs expenditure on addition or alteration in a building which enhances its value, the expenditure can again be of a capital nature. If the building is....