TMI Blog1981 (9) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 incurred by the assessee on the kilns this year would be covered by the term 'current repairs' occurring in section 31(i) of the Income-tax Act, 1961 ? Assessment year 1971-72: Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the expenditure of Rs. 23,977 incurred by the assessee on the kilns this year would be covered by the term 'current repairs' occurring in s. 31 (i) of the Income-tax Act, 1961 ? " The two questions arise in exactly similar circumstances. The assessee-company carries on the business of manufacture and sale of lime from limestone. It had in all six kilns. During the accounting year which ended on June 20, 1969, it incurred an expenditure of Rs. 27,714.45 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a layer of masonry of about 2"-6" thickness. Inside this comes the insulation layer of the thickness of 9". Then comes the innermost layer of the kiln, viz., the lining of refractory bricks of a thickness of 9". Roughly the top 1/3rd of the kiln is the pre-heating zone. Immediately below, to the same extent, is the calcination zone wherein the temperature of the kiln ranges between 1100 degree C to 1300 degree C. Beneath this calcination zone is the cooling zone. (ii) There are openings at the bottom round the kiln from which the calcined lime is taken out. As and when calcined lime is taken out in the space falling vacant limestone is put in at the top. That is to say as the kiln is full all the time, to the extent of the quantity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kilns Nos. 3 and 4 had been constructed in 1965 and were relined for the first time in 1969, and that kilns Nos. 5 and 6 which had been constructed in 1966-67 had been relined during the accounting year which ended on June 30, 1970. On the strength of the above facts it was contended that the expenditure in question had been incurred not with a view to bringing into existence any asset of an enduring nature but merely to protect and preserve the existing equipment for the manufacture of lime. It was submitted that the mere fact that the expenditure was substantial could not be a circumstance treating it as capital in nature. The Tribunal, after referring to the decisions of the Supreme Court in v. Mahalakshmi Textile Mills Ltd. [1967] 66 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary keep the plant in working order. It has been pointed out that the expenditure in question has been incurred after a period of four or five years It was only a question of some current repairs having been carried out by the assessee. It has also been pointed out that, in the process, the assessee had not laid out any expenditure with a view to improve the quality of the kiln or its efficiency. Red bricks were replaced by fire bricks or refractory bricks because of the shortage of red bricks. The expenditure had really been incurred only for the purpose of relining the kilns which was necessary to maintain them in working condition. In these circumstances, the Tribunal having accepted the facts urged by the assessee, was clearly right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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