TaxTMI 
TaxTMI 
2014 (8) TMI 641
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....owing substantial questions of law:- "A. Whether on the facts and in the circumstances of the case the Income tax Appellate Tribunal was justified in law in reversing the action of CIT(A) by holding that the expenditures incurred by the appellant are capital in nature? B. Whether on the facts and in the circumstances of the case, the findings of the Income Tax Appellate Tribunal in accepting the appeal of the department are perverse and coloured by irrelevant considerations and erroneous criteria? 2. Briefly, the facts necessary for adjudication of the controversy involved, as narrated in the appeal, may be noticed. The assessee is a partnership firm. During the year under consideration, the firm was dealer of LML scooters manufactured a....
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....lt, the amount of Rs. 2,37,572/- was disallowed. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income tax (Appeals) [CIT(A)]. Vide order dated 11.10.2000, Annexure A.3, the appeal was allowed. Not satisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 17.9.2004, Annexure A.1, the Tribunal partly allowed the appeal holding that the expenditure was capital in nature. Hence the present appeal by the assessee. 3. Learned counsel for the appellant-assessee submitted that the appellant had carried out expenditure which was incurred towards marble flooring, plaster of paris, painting, wood work etc. Relying upon judgment of the Delhi High Court in CIT vs. Hi Line Pens (P) Limited, (....
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....egy and to meet the challenge of competition from their major competitor M/s Bajaj Limited. According to plain reading of Section 30(a) (i) of the Act, any expenditure incurred by the assessee towards repairing the premises taken on rent if he has undertaken to bear the cost of the repairs so as to make it more conducive to its business activity falls within the expression 'repairs to the premises' and the cost of such repairs is allowable as deduction under the said provision. 7. The following observations recorded in Hi Line Pens (P) Limited's case (supra) would be relevant:- "What the assessee has done in the present case has been construed to be repairs by the Tribunal as a finding of fact. It has not brought about any new....
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....lated by Chagla, CJ in the case of New Shorrock Spinning and Manufacturing Co. Ltd. v. CIT : (1956) 30 ITR 338 (Bombay) as to when could an expenditure be said to have been incurred on "current repairs". In New Shorrock Spinning and Manufacturing Co. Ltd. (supra), it was observed that the expression "current repairs" means expenditure on buildings, machinery, plant or furniture which is not for the purpose of renewal or ITA No.1202-2006 restoration but which is only for the purpose of preserving or maintaining an already existing asset and which does not bring a new asset into existence or does not give to the assessee a new or different advantage. It was further observed that „current repairs‟ are such repairs as one attended t....
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....anent nature in it. The AAC found that the roof was leaky. The landlord, for the meagreness or insufficiency of the rate of rent, did not seem to be in favour of investing a sizeable amount of nearly Rs. 23,000 on the repairs. Such a business, as the assessee was doing, cannot be advantageously carried out under a leaking roof and the assessee in the best interests of his business had to undertake it. Business is always done for the best and the maximum attainment of profits. A lessee, the period of whose lease is limited, has to strive to get the maximum profit during the continuance of his lease in the premises. The assessee in this case, therefore, had two options open to it, either to carry out the repairs and get the maximum return or ....