TMI Blog2000 (11) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to bring the assets into the normal original working condition, and no new asset was required, and as such in no way the same can be treated as capital expenditure. 3. That the learned Commissioner of Income-tax (Appeals) has erred in not accepting the explanation of the appellant and considering the citations given by the appellant. 4. That the learned Commissioner of Income-tax (Appeals) has erred in confirming the addition of Rs. 2,100 out of stationery and printing expenses, and Rs. 6,505 out of motor car expenses, which is highly excessive and arbitrary.” As regards grounds Nos. 1 to 3 the assessee’s challenge is with regard to treating of Rs. 1,90,363 in building repair account and Rs. 1,37,621 in racks and fixtures repair a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rigade to control it. The Assessing Officer has noted that in the building repairs account, substantial purchases of cement, saria, steel, plywood, etc., are shown. The expenses on this account after the fire broke out were to the extent of Rs. 1,90,363 as against the total expenditure of Rs. 2,30,743. Even in the next financial year, according to the Assessing Officer, heavy expenses were shown. Similar was the position in repairs account of rack and fixture. In this account, expenditure after incident was shown at Rs. 1,37,021 as against the total expenditure of Rs. 1,44,329. He also noted that under this head, outright purchases of racks and fixture were shown instead of expenses on repairs. From this, the Assessing Officer took a view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowability of expenditure as revenue expenditure or otherwise. It was pleaded for allowing the entire expenditure as claimed. The learned Commissioner of Income-tax (Appeals) while considering and rejecting the claim of the assessee has concluded in para. 2.3 and his finding starts from fifth line at page 3 of his order which reads as under : “I find that the Income-tax Officer has specifically referred to new construction under the head building repairs account and new purchases under the head repair of racks and furniture. He has also stated that the appellant had not filed the details of the claim made against the fire to the insurance company, copy of the survey report had also not filed. These details have not been filed even before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. Tara Prasad Lodha [1975] 99 ITR 173 (Patna) ; Guntur Merchants Cotton Press Co. Ltd. v. ITO [1977] 108 ITR 620 (AP) ; Empire Jute Co. Ltd. v. CIT [1980] 124 ITR 1 (SC) ; K. C. P. Ltd. v. ITO [1990] 34 ITD 66 (Hyd) [SB] and K. C. P. Ltd. v. ITO [1991] 38 ITD 15 (Hyd) [SB] and it was vehemently argued that repairs conducted to bring the original asset into existence after the damage done by fire cannot amount to new construction or creating of an asset of enduring nature. It was pleaded for deleting the addition by accepting the claim of the assessee as made before the Assessing Officer. The learned Departmental Representative while relying upon the basis and reasoning as given by the authorities below has pleaded for confirmation of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the chambers of the cold storage was almost totally burnt, in the fire which broke during the year under consideration. So the assessee had to carry out the repairs in the premises to make it function and to bring into existence original assets by carrying out necessary repairs to the building as well as to the racks, etc. The Department has not brought on record anything to suggest that any new operation of the cold storage has come into existence by spending the amount as claimed by the assessee. Therefore, in view of the facts and circumstances, we are of the view that the expenditure incurred for repairing of damaged portion of the cold storage to bring back original structure or amount spent on racks etc., is of revenue nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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