1967 (12) TMI 15

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... J.-This reference relates to the assessment year 1960-61. The assessee is a co-operative society for ex-servicemen engaged in transport of goods and passengers. It appears till 1959-60 the income of such societies was exempt from tax. No assessment was, therefore, made on the society till then, and it was assessed to tax for the first time for the year in question. The assessee claimed deduction ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on that we should answer in favour of the assessee. The finding of the Tribunal is that the assessee completely renovated the body of a certain motor vehicle by putting in a new body on an old chassis. The question is whether the expenditure was of a revenue character. The deduction was claimed under section 10(2)(v). Sub-section (2) of section 10, by clause (v), directs that profits and gains sha....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....re of the same view. The broad test, in our opinion, to find out whether it is a repair is to see whether what has been done is to an existing asset and that by doing the thing, the result is not the creation of a new asset. That is the view which prevailed with Commissioner of Income-tax v. Sheikhupura Transport Co. Ltd. But we may observe that it is not the comparative measure of the expenditure....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ncome-tax, Mysore High Court pointed out : " In finding out whether a given case falls within the scope of clause (v) of section 10(2), the true test is whether, as a result of the expenditure which is claimed as expenditure for repairs, what is really being done is to preserve and maintain an already exisiting asset or whether the object of such expenditure was to bring a new asset into existe....