2023 (2) TMI 841

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.... "1. The learned CIT(A) erred in law and on facts in sustaining the addition of 50,54,779/-, made by the learned AO. 2. The IT authorities erred in law and on facts in holding that the repairs and maintenance expenses of Rs.53,20,820/-, were capital in nature. The IT authorities ought to have appreciated that there was no enduring benefit emerging out of the said expenditure." Brief facts: 2. It is mentioned in the assessment order that during the year assessee company purchased an existing factory shed along with its land, the relevant part is reproduced as under: 3. Assessee spend Rs.53,20,820/- on repairs and renovation of the said newly purchased factory premises. The Assessing Officer(AO) called for the details and held that it....

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....wall, life of the compound wall increased giving rise to enduring benefit. Discussion & Findings : 6. We have heard both the parties and perused the records. It is an admitted fact that assessee has purchased adjacent factory shed. After purchasing the factory, the assessee carried out renovation and repairs. On going through the list of expenses and vouchers submitted by the ld.AR in the paper book, it is observed that assessee has carried out flooring work i.e. assessee changed the flooring of the factory shed. It has also carried out plumbing work, painting work. It has also carried out the renovation of the compound wall. It is not the claim of the AO that a new asset has been created. It is a fact that there was an existing factory ....

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....ended or that the asset is made to give better service than it was giving in the past is not decisive of the matter. The nature of the repairs undertaken will have to be taken into consideration and, as we have stated above, the repairs undertaken were not by way of any major structural repairs but it was plastering work that was undertaken by adopting sophisticated process called guniting process and, therefore, it will not be possible to accept the contention of Mr. Joshi. In the context of the aforesaid contention urged by Mr. Joshi it will be useful to refer to an unreported judgment of this court in the case of Commissioner of Income-tax v. David Mills Ltd. in I.T. Reference No. 17 of 1950, decided on 10th October, 1950. (The judgme....