2017 (7) TMI 808

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.... work of Omax group of companies under the two proprietorship firm M/s Budhwar Engg. and M/s Budhwar Auto Industries at Village Malpura of Rewari. Return declaring an income of Rs. 2,11,020/- was filed. The assessment was completed at a total income of Rs. 17,37,100/-, inter-alia, making addition of Rs. 3,58,090/- treating the expenses incurred for building repairs and maintenance as capital expenditure and also an addition of Rs. 1,71,354/- u/s 40A(3) of the Act. The assessee's claim of loss on sale of fixed assets amounting to Rs. 9,19,756/- was disallowed by the Assessing Officer. Ld. CIT(A), while partly allowing the assessee's appeal, confirmed all the three additions except reducing the disallowance u/s 40A(3) from Rs. 1,71,354/- to R....

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....sessee did not press ground no.1 and, accordingly, the same is dismissed as not pressed. 4. Brief facts apropos ground no.2 are that the Assessing Officer noticed from Profit & Loss Account of M/s Budhwar Engineering Works that assessee had incurred expenses of Rs. 8,55,908/- on account of repair and maintenance, during the year under consideration. From reply filed by the assessee, the Assessing Officer noticed that the expenses included expenses on account of building repair and maintenance of Rs. 3,97,878/-. He noted from the Balance Sheet that the value of building in the schedule of fixed assets was shown at Rs. 2,46,672/-. Keeping in view the value of building vis-à-vis quantum of expenses claimed as repair and maintenance, he....

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....is evident that the payments were made for purchase of cement, tiles etc.. The Assessing Officer concluded that the expenses were in capital filed primarily because in the fixed assets schedule the value of building was shown at Rs. 2,46,672/-. I do not find any justification in the reasoning of Assessing Officer confirmed by ld. CIT(A) because value of building as per books primarily represented written down value of building. The assessee had explained that the building was more 10-15 years old. The assessee had incurred these expenses throughout the year and since the building was old, therefore, it required regular repairs. Under these circumstances, I am of the considered opinion that the expenses incurred by assessee were only for the....