2016 (12) TMI 1345

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....INTENANCE EXPENSES OF Rs. 5,36,217/- BY TREATING THE SAME AS CAPITAL EXPENDITURE. 1. The Learned CIT(A) erred in confirming disallowance of the repairs and maintenance expenses on factory building of Rs. 5,36,217/- paid to Prabhu Constructions, treating the same as capital - expenditure after allowing depreciation thereon of Rs. 53,622/-. 2. The Learned CIT(A) ought not to have confirmed disallowance of revenue expenditure of Rs. 5,36,217/- as capital expenditure. 3. Without prejudice to above, there was error in computing the disallowance for which a rectification application is also made u/s 154 dated 11.3.2013 separately. 4. The disallowance of Repairs & Maintenance expenses as capital expenditure requires to be deleted." 3. The Brief facts of the case are that the assessee is a firm engaged in the business of manufacturing of engineering goods like lighting, electrical, electronics, auto ancillary products and glow signage's. It was observed by the A.O. on perusal of Schedule 16 to the Profit & Loss Account for the year ended 31st March, 2010 that the assessee has claimed a sum of Rs. 19,92,370/- on account of repairs to building (factory). In the course of sc....

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....h soling fixing by sand 81982.50     Concrete and rubble soling 46510.10 14 14.08.2009 Bricks masonry 6750.00     Plaster 6000.00     TOTAL 536217.49   4.Aggrieved by the assessment order dated 22-02-2013 passed by the A.O. u/s 143(3) of the Act, the assessee filed first appeal before the ld. CIT(A). 5. The ld. CIT(A) rejected the appeal of the assessee following the decision of the learned CIT(A) with respect to the appeal of the preceding assessment year i.e. 2009-10. During appellate proceedings, the ld. CIT(A) observed that the assessee had five different units at different location having huge area. The details of units on which the repairs & paintings are as under:- - Unit I at Marol Andheri East (21389 sq. ft.) - Unit II at Vasai Village - Gokhiware (8135 sq. ft.) - Unit III at Navghar, Vasai (E) (5430 sq. ft.) - Unit V at Vasai Chinchpada, Village - Gokhiware (28328.20 sq. ft.) The assessee submitted that the factory buildings were purchased/constructed in years 1971-72, 1997-98, 1989-90, 2002-03, 2004- 05 and the repairs were carried out to keep the premises in usa....

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....ellate orders dated 09-10-2014 . 6.Aggrieved by the appellate order dated 09-10-2014 passed by the ld. CIT(A), the assessee filed appeal with the Tribunal. 7. The ld. Counsel for the assessee submitted that similar issue arose in the preceding assessment year 2009-10 before the Tribunal, whereby the Tribunal in ITA No. 1185/Mum/2013 for the assessment year 2009-10 vide appellate orders dated 24th April, 2015 allowed the claim of the assessee toward repair and maintenance expenditure by holding the same to be revenue expenditure and, hence, the matter is covered by the afore-stated decision of the Tribunal for assessment year 2009-10 as the facts are identical in the instant assessment year. 8. The ld. D.R. relied on the order of the authorities below. 9. We have considered the rival contentions and also perused the material available on record including the afore-stated Tribunal order. We have observed that the assessee has five factories with huge covered areas as mentioned in preceding para's of this order and these factories were stated to be built /acquired in the year 1971-72, 1997-98,1989-90 to 2002-03 , 2004- 05. . The assessee has claimed to have incurred expens....

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....r of the co-ordinate Bench of this Tribunal in assessee's own case in ITA No . 1185/Mum/2013 vide orders dated 24-04- 2015 for the preceding assessment year 2009-10 , we are of the considered view that the assessee has incurred expenses in the nature of current repairs u/s 30 of the Act and hence the same cannot be treated as capital expenditure in the absence of creation of any new asset of enduring nature and hold them to be revenue expenditure . However, consequently the depreciation allowed by the Revenue shall be adjusted accordingly in accordance with our above orders. We order accordingly . 10. In the result, the appeal filed by the assessee in ITA No. 117/Mum/2015 for the assessment year 2010-11 is allowed. Order pronounced in the open court on 31st October, 2016. ============= Document 1 Sr.No. Date Bill No. I EVERGREEN ENGINEERING CO. PVT. LTD. PAN: AAACE2499L ASSESSMENT YEAR: 2009-10 DETAILS OF BUILDING REPAIRS & MAINTENANCE PAYMENTS TO M/s PRABHU CONSTRUCTIONS Particulars Rs. Rs. (21389Sq.Ft) Factory Building (Unit-I) at Andheri (East) Plot no.B-35, Mahal Industrial Estate, Mahakali Caves Road, Gundavli, Andh....