TMI Blog2013 (12) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... house R&D efforts - Assessee satisfied the requisite conditions for accelerated depreciation and the revenue failed to bring evidence on record to rebut such evidences - Decided against Revenue. Repair and maintenance - Held that:- Following assessee's own case for the A.Y. 2006-07 - The expenditure was incurred by the assessee on renovation of floors, ceiling, painting etc. The expenditure is duly allowable in the hands of assessee being current repairs - The expenditure incurred on purchase of carpets being replacement of existing asst is an allowable expenditure - Such expenditure incurred by the assessee cannot be regarded as capital expenditure, where the claim is in the nature of repair and replacement - Decided against Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items purchased by the appellant were new identifiable assets. 3 In facts and circumstances of the case, ld. CIT(A) has erred in holding the acquisition of new assets for replacement of existing assets as current repairs, though the Hon'ble Supreme Court in cases of CIT V. Sri Mangayarkarshi Mills (P) Ltd., 315 ITR 114 CIT V. Sarvana Spinning Mills (P) Ltd., 293 ITR 201 has held that replacement of machinery was capital expenditure and could not be treated as current repairs. 4 It is prayed that the order of the ld. CIT(A) be set aside and that of the Assessing Officer restored." 3. Ground No. 1 - After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee has claimed accelerated highe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished by the assessee for his income, or the income of any other person in respect of which he is assessable, for an previous year in which the Research (DSIR) Ministry of Science and Technology, Government of India. A copy of recognition of our R D Centre by the Secretary, Department of Scientific and Industrial Research, Government of India for relevant Assessment year is attached as Annexure -I. Further, the Department of Scientific and Industrial Research (DSIR) Ministry of Science Techno logy, Government of India had also issued us the certificate for claiming accelerated depreciation allowance under Rule 5(2) of the I.T. Rule, 1962 on 4th January, 2006 pertaining to Financial Year 2004-05 (Assessment year 2005-06) and the copy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 11.10.2010 it has been stated by the assessee as under: "Further, the Department of Scientific and Industrial Research (DSIR) Ministry of Science Technology, Government of India had also issued us the certificate for claiming accelerated depreciation allowance under Rule 5(2) of the I.T. Rules, 1962 on 4th January 2006 pertaining to Financial Year 2004-05 (Assessment year 2005-06_ and the copy of the same has been enclosed herewith as Annexure 2 for your perusal." Further identical issue came up for consideration before the Tribunal in assessee's own case for Assessment year 2006-07 in ITA No. 107/Chd/201. This issue came up for consideration and the same has been adjudicated vide para 23 to 25 which is as under: "23 We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ld. CIT(A) cannot be sustained and this ground of appeal of the assessee is allowed." Following the above we decide this issue against the Revenue. 8 Grounds No. 2 3 - After hearing both the parties we find that during assessment proceedings the Assessing Officer has examined the details of repair and maintenance in building and plant. According to him some of these items were of capital nature and accordingly a sum of Rs. 30,29,737 was disallowed by treating the same as capital expenditure and allowing only depreciation. 9 On appeal, the ld. CIT(A) deleted the addition on the basis of order of the Tribunal for A ssessment year 2004-05 in ITA No. 594/Chd/2009 and 107/Chd/2010. 10 Before us, the ld. DR for the revenue suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iture by the Assessing Officer. Out of the repair maintenance of the building, the Assessing Officer disallowed Rs. 18,03,271/- being spent on providing floor tiles, purchase of marbles, assembly shop work and paint shop etc. as being capital in nature. 18 From the perusal of record, we find that the expenditure was incurred by the assessee on renovation of floors, ceiling, painting etc. The expenditure is duly allowable in the hands of assessee being current repairs. The expenditure incurred on purchase of carpets being replacement of existing asst is an allowable expenditure. Such expenditure incurred by the assessee cannot be regarded as capital expenditure, where the dame is in the nature of repair and replacement. We are in conform ..... X X X X Extracts X X X X X X X X Extracts X X X X
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