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2011 (6) TMI 339 - HC - Income TaxRepairs and reconditioning of Fent Gear Machine expenses - revenue capital nature - The amount or time involved in the repairs is not a relevant factor while deciding whether the repairs qualify as current repairs - The mere fact that the repairs result in an improvement is not enough to take the repairs out of the category of current repairs - The old principle invoking the test of improvement has to be applied with discernment in the present age when the march of technology and the unending fabrication of new materials and products make even current repairs, primarily, so called yield improvement in varying degrees - Similar expenses were allowed by the ITAT as revenue in nature and all these orders were accepted by the Department. However, it is only in respect of 2005-06 and 2006-07 present appeals are filed. From the aforesaid facts it is to be opinioed that not only the expenditure incurred on repairs is on account of current repairs for which deduction would be admissible under Section 31(1) it is not capital expenditure but revenue expenditure incurred for business purposes which will qualify as deduction under Section 37. Therefore, the expenditure incurred by the assessee on repairs of machinery in the present years under appeal is a revenue expenditure allowable for deduction to the assessee.
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