TMI Blog2017 (3) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... ansal JUDGMENT 1. Heard Sri Ashish Bansal learned counsel for the appellant assessee and Sri Subham Agarwal learned counsel for the Department. This is assessee's appeal for the assessment year 1995-96 against the order passed by the Tribunal dated November 22, 2007. 2. The following questions of law sought to be answered are as under : 1. Whether there existed any material which could justify the findings of the Tribunal to the effect that the expenditure aggregating ₹ 60,09,212 incurred under various heads was of capital in nature and was not admissible as business expenditure ? 2. Whether the Tribunal was legally correct in reversing the order of the first appellate authority in the matter of admissibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction and reconstruction in the other units at Agra and Lucknow respectively, the same could not be termed as capital expenditure rather they were amounts which were spent in the day today running of the business of the assessee and only qualify as revenue expenses. 4. Learned counsel for the assessee relies on a short discussion made by the Commissioner of Income-tax (Appeals) who says that the replacement of a bath tub in hotel is in nature of the repairs. What the Commissioner of Income-tax ignores completely is that two old floors of the hotel received renovation in the bath rooms which included the replacement of old fittings into new fittings which has the effect of upgrading the hotel and such an upgradation would definitely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the firm view that the expenditure made by the assessee in its hotel was of the capital nature and not of the revenue nature (page 121 of 315 ITR) : Moving on to the issue of 'current repairs' under section 31 of the Act, the decision of this court in CIT v. Saravana Spinning Mills (P) Ltd. [2007] 293 ITR 201 (SC) is again relevant. This court has laid down that in order to determine whether a particular expenditure amounts to 'current repairs' the test is 'whether the expenditure is incurred to 'pre serve and maintain' an already existing asset and not to bring a new asset into existence or to obtain a new advantage. For 'current repairs' determination, whether expenditure is 'revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y :- 'Where old parts are not available in the market (as seen in the case of CIT v. Mahalakshmi Textile Mills Ltd., AIR 1968 SC 101 ; [1967] 66 ITR 710 (SC), or 'Where old parts have worked for 50-60 years.' In the instant case, the assessee has not claimed any of the above stated exceptions. The Saravana Mills (supra) case also restricts the scope of 'current repairs' to repairs made to machinery, plant and/or furniture. In this case, replacement of machine can at best amount to a repair made to the process of manufacture of yarn. Further this court has also observed in Saravana Mills (supra) case that if replace ment was held to be 'current repair' in such cases, section 31(i) will be completely ..... X X X X Extracts X X X X X X X X Extracts X X X X
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