TMI Blog2014 (11) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... , further, held that the basic test to find out as to what would constitute current repairs is that the expenditure must have been incurred to reserve and maintain an already existing asset and the object of the expenditure must not be to bring a new asset into existence or to obtain a new advantage. We are, hence, of the opinion that the present appeal deserves to be allowed. In view of the above discussion, the decision relied on by Mrs. Bhatt in BRITANNIA INDUSTRIES LTD. VS. CIT ANR. [ 2005 (10) TMI 30 - SUPREME COURT] shall not apply to the facts of the case on hand. Present appeal is allowed. - Tax Appeal No. 12 of 2002 - - - Dated:- 21-11-2014 - Mr. KS Jhaveri And Mr. K.J.Thaker, JJ. Mr JP Shah, with Manish J Shah, Adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, submitted that the Tribunal committed an error in passing the impugned order, by holding that the expenditure incurred by the assessee was capital expenditure. He, further, submitted that the Tribunal ought to have appreciated the fact that the assessee had merely carried out the repairing of the old furnace and had not installed the new one. He submitted that in view of the provisions of Section 31(i) of the Act, the Tribunal ought to have held that, though, the expenditure incurred by the assessee was capital in nature, it is allowable. 5. In support of his submissions, Mr. Shah, placed reliance on a decision of the Apex Court in CIT VS. SARAVANA SPINNING MILLS P. LTD. [2007] 293 ITR 2001 (SC). He, therefore, prayed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the furnace was old and it required repairs for better performance. The CIT(A), further, recorded that there was no increase in production capacity due to the aforesaid repairs. The CIT(A) in Paras-9 to 11 of its order, further, held as under; 9. Another aspect to be considered is as to whether the appellant should have accounted for the material utilised in repairs as its closing stock. In this regard the Representative of the appellant point out that the materials to be utilised in carrying out the repairs were not stocked anywhere but during the period furnace is cooled, the furnace structure of refractories is constructed away from the furnace site to find out whether the refractories supplied by the manufacture s are as per specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the details of the cold repairs expenses, we enclosed herewith at Annexure-C in a tabular form the expenses incurred on cold repairs for the accounting year 1990-91 with narrations. The relevant evidence for the arrival of refractories at the site of the factory is also available in the form of vouchers of the shipping agents and copies of bill of lading which are collectively attached at Annexure-D. The original bills/vouchers of salaries paid to masons engaged in cold repairs work are also available for your satisfaction. The representative of the applicant, therefore, produced before me copies of vouchers and bills. After going through all the vouchers and bills, it is seen that only following five vouchers are not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported by the factual matrix. 9. The Apex Court in CIT VS. SARAVANA SPINNING MILLS P. LTD. (Supra),wherein, the Apex Court held that to decide the applicability of section 31(i) the test is not whether the expenditure is revenue or capital in nature, which test has been wrongly applied by the High Court, but whether, the expenditure is current repairs . The Apex Court, further, held that the basic test to find out as to what would constitute current repairs is that the expenditure must have been incurred to reserve and maintain an already existing asset and the object of the expenditure must not be to bring a new asset into existence or to obtain a new advantage. We are, hence, of the opinion that the present appeal deserves to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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