TaxTMI 
TaxTMI 
TaxTMI 
1980 (1) TMI 1
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....er military occupation from 1942 and was released in 1955. During the period of military occupation the assessee incurred expenditure on account of minimum royalty payable in respect of the colliery, the surface rent and salaries for the watch and ward employees. The expenditure was allowed in income-tax proceedings as a business expenditure. After the colliery was released by the military, the assessee incurred a further expenditure amounting to Rs. 1,61,742 on the colliery with a view to resuming mining operations. The expenditure was incurred during the previous year beginning October 24, 1957, and ending November 11, 1958, relevant to the assessment year 1959-60. In the assessment proceedings for that assessment year the assessee claime....
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....ess expenditure of the assessee. After the colliery was handed over to the assessee upon derequisition, the assessee incurred, during the relevant period, an expenditure of Rs. 1,61,742 in renovating the building, reconditioning the machinery and clearing the land of debris accumulated over a number of years. The expenditure of Rs. 1,61,742 consisted of Rs. 66,937 spent on the staff and labour force by way of salaries, wages and other benefits and an amount of Rs. 94,805 spent on the purchase of various stores, machinery repairs, chowrah repairs, etc. This expenditure had to be incurred by the assessee for the purpose of putting the machinery in working order and bringing the colliery to a state where the mining operations could be resumed.....
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.... urged that if s.10(2)(v) is the relevant clause, being the specific provision in respect of expenditure on current repairs to buildings and machinery, there is no justification for relying on s. 10(2)(xv). Section 10(2)(xv) is a residuary clause, and deals with expenditure not being an allowance of the nature described in any of the preceding clauses of s. 10(2). The submission is that where repairs are effected to buildings and machinery a deduction under s. 10(2) is permissible only in respect of current repairs, and repairs which are not " current repairs " are not intended to be the subject of relief. The Act, it is contended, limits the repairs to " current " repairs. The repairs made by the assessee, it is said, cannot be described a....
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.... PC 178 to be applicable in the case of losses, and it has been applied by the courts in India to business expenditure incurred by an assessee. Motipur Sugar Factory Ltd. v. CIT [1955] 28 ITR 128 (Pat) and Devi Films Ltd. v. CIT [1970] 75 ITR 301 (Mad). The principle found favour with this court in Badridas Daga v. CIT [1958] 34 ITR 10, 15 (SC) and Calcutta Co. Ltd. v. CIT[1959] 37 ITR 1,9 (SC). If the contents of that rule be true on general principle, there is good reason why the scope of s. 10(2)(xv) should be construed liberally. In our opinion, even if the expenditure made by the assessee in the present case cannot be described as " current repairs ", he is entitled to invoke the benefit of s. 10(2)(xv). We may mention that in Law Ship....
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.... continued to be employed and the business continued to be carried on, one alone of the units, the South Samla Colliery was compelled to suspend production. The suspension was expected to be of temporary duration, because the property was merely requisitioned for military use, it was not acquired. As soon as the property was de-requisitioned, the assessee took measures to resume production of coal. It was necessary to remove the impediments which had come in the way by reason of the temporary suspension of work. The buildings were renovated, the machinery reconditioned and the accumulated debris removed from the land. The colliery was, in a word, reinstated to the condition necessary for ensuring production. No new asset was brought into ex....