TMI Blog1997 (1) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount spent on current repairs to buildings, machinery, plant, furniture, employed in the business. The assessee-appellant carries on the business of exhibiting films in a theatre called Naval Talkies at Panipat. He had purchased the said building in 1937. It was a ginning factory then. He ran the factory till 1940. In the year 1945, he converted it into a cinema theatre and was exhibiting films therein. During the period 1960 to March, 1961, the assessee extensively repaired the theatre by expending substantial amounts. The amounts spent by him are : on machinery ₹ 16,002, new furniture ₹ 27,889, sanitary fittings ₹ 5,225 and replacement of electrical wiring ₹ 13,604. In addition thereto, a total amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10(2). In New Shorrock Spinning and Manufacturing Co. Ltd.'s case [1956] 30 ITR 338 (Bom), Chagla C. J., speaking for the Division Bench, observed that the expression current repairs means expenditure on buildings, machinery, plant or furniture which is not for the purpose of renewal or restoration but which is only for the purpose of preserving or maintaining an already existing asset and which does not bring a new asset into existence or does not give to the assessee a new or different advantage. The learned Chief Justice observed that they are such repairs as are attended to as and when need arises and that the question when a building, machinery, etc., requires repairs and when the need arises must be decided not by any academi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in CIT v. Sri Rama Sugar Mills Ltd. [1952] 21 ITR 191. In Liberty Cinema v. CIT [1964] 52 ITR 153 (Cal), P. B. Mukharji J., speaking for a Division Bench of the Calcutta High Court, held that an expenditure incurred with a view to bring into existence a new asset or an advantage of enduring nature cannot qualify for deduction under section 10(2)(v). In our opinion the test involved by Chagla C. J., in New Shorrock Spinning and Manufacturing Co. Ltd.'s case [1956] 30 ITR 338 (Bom) is the most appropriate one having regard to the context in which the said expression occurs. It has also been followed by a majority of the High Courts in India. We respectfully accept and adopt the test. Applying the aforesaid test, if we look at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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