TMI Blog1998 (2) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the cases, the Tribunal was right in holding that the expenditure incurred by the assessee in substantially replacing the old building, during the previous years relevant to the assessment years 1985-86, 1986-87 and 1987-88 is allowable as current repairs under section 31(1) or under section 37 of the Income-tax Act, 1961 ?" Arguments of Mrs. Chitra Venkataraman, learned counsel representing Mr. C. V. Rajan, learned junior standing counsel for the income-tax cases representing the Revenue and Mr. P. P. S. Janarthana Raja, learned counsel representing K. V. Rajan and Suresh Kumar, learned counsel appearing for the assessee were heard. The assessee runs a hotel business at Ooty. He, it appears, claimed in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78] 114 ITR 210 (Mad), wherein the assessee claimed a deduction of an expenditure of Rs. 37,390 incurred in providing decorated mirrors, plaster-moulded roof plywood panels, etc., in respect of the hotel premises during the previous year and the same was negatived by the Income-tax Officer in the view that the expenditure could not be said to be in the nature of current repairs to the building, as it had brought into existence an asset of an enduring nature and hence it was of a capital nature. (b) The disallowance was confirmed by the Appellate Assistant Commissioner. (c) The Tribunal, however, held that the expenditure was incurred wholly for the purpose of the business and was allowable as a deduction under section 37. (d) On a ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. Dasaprakash [1978] 114 ITR 2 10, it goes without saying that the expenditure incurred by the assessee for the relevant assessment years in repairing and modernising the hotel and replacing the existing components of a portion of the building, furniture and fittings cannot at all be stated to be of enduring in nature, in the nature of being a "capital expenditure" ; but, definitely such an expenditure would fall under the category of "revenue expenditure" in nature to be allowed, as a deduction under section 37 of the Income-tax Act. In this view of the matter, these reference applications deserve to be and are accordingly rejected. These reference applications are thus disposed of. No costs. - - TaxTMI - TMITax - Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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