TMI Blog2017 (5) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of flooring, plastering, doors, plumbing etc. Such amount incurred in strengthening of existing layout cannot be regarded as a capital expenditure. The expenditure on repairs of the building is merely incurred to refurnish and renovate the existing structure and is not in the nature of creation of a capital asset. No structural changes is shown to have been made by the assessee while incurring such expenditure. A repair ordinarily involves renewal and restoration of the existing wear and tear. Such expenditure, in our view, is in the nature of current repair in spite of major expenses alleged to have been incurred - Decided against revenue. Contravention of section 145A while valuing the closing stock for determination of taxable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The alternative ground towards business loss also does not merit acceptance for the similar reason. The loss is required to be proved to be emanating from business of the assessee. Secondly, the loss is required to be proved to have been crystallized during the year. No material or evidence has been brought on record to this effect. - Decided against assessee. Disallowance under s.14A computation - Held that:- The disallowance under s.14A is restricted to the extent of dividend income earned. - I.T.A. No.2375/Ahd/2013, And Cross Objection No.49/Ahd/2014 - - - Dated:- 1-5-2017 - SHRI S.S. GODARA, JUDICIAL MEMBER, AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For The Revenue : Shri Dinesh Singh, Sr.DR For The Assessee : Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. Ground No.1 of Revenue s appeal relates to determination of nature of expenditure incurred for renovation of factory building. It is the contention of Assessing Officer (AO) that expenditure incurred ₹ 21.63 lakhs for repair and renovation of the factory building is capital expenditure and thus not eligible for deduction in terms of section 30(a)(ii) of the Act. 4.1. In the course of hearing, the Ld.DR for the Revenue referred to the assessment order and submitted that the assessee has inter alia incurred ₹ 21.63 lakhs on account of building repairs and interest incurred thereon which is not in the nature of revenue expenditure and therefore no permissible deduction. The Ld.DR submitted that typically, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards repairs. All the expenses incurred towards repair are revenue in nature. 4.3. We have examined the issue carefully and perused the record. The limited controversy is whether the repair expenditure so incurred by the assessee represents capital expenditure or a revenue expenditure. Having considered the nature of work executed by the assessee, we observe that the amount spent cannot be said to be a capital expenditure as made out by the revenue. The expenditure might have secured some enduring benefit to the assessee because of the renovation. However, the test of enduring benefit per se is not a certain or conclusive test and cannot be applied blindly and mechanically with regard to the particular facts and circumstances of the give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of closing stock. The CIT(A) after relying upon several judicial pronouncements to this effect found merit in the grievances of the assessee. The CIT(A) also noticed the decision of the Hon ble Delhi High Court in the case of CIT vs. Mahavir Alluminium Ltd. 297 ITR 77 (Delhi) for the proposition that when there is adjustment in the valuation of closing stock, to give effect to section 145A of the Act, the opening stock also has to be simultaneously increased by any tax, duty, cess or fee actually paid or incurred with reference to such stock. if the same has not been added for the purpose of valuation in the account. The CIT(A) also took note of the guidance note of ICAI. Reliance was also placed on the decision of the Coordinate Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Ahd/2013 AY 2010-11). 7. As per ground No.1 of the Cross Objection, the assessee has expressed its dissatisfaction for disallowance of ₹ 50,000/- claimed as bad debt by the AO and sustained by the CIT(A). 7.1. The Ld.AR for the assessee submitted that the aforesaid amount was given as advance in the ordinary course of business to M/s.Gujarat Agencies Corporation about 10 years back. The amount written off as bad debt during the year is thus allowable deduction under s.36(1)(vii) r.w.s. 36(2) of the Act. The Ld.AR submitted in the alternative that the aforesaid claim ought to have been allowed as business loss under s.28 of the Act. 7.2. We do not find any merit in either of the contentions. The assessee has not been ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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