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TMI Blog2021 (8) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000 from the total disallowance of Rs. 46,40,199 as Capital Expenditure. 1.02 The learned CIT (A) failed to appreciate the various issues raised in the appeal on this ground and erred in partly allowing this Grounds of Appeal. 3. Brief facts of the case are that the AO observed that assessee during the year had undertaken a major refurbishment of its business premises and expenditure, which was capitalized amounted to Rs. 59,22,000/-. Further, he observed that the assessee had debited a sum of Rs. 37,01,849/- on account of "repair and maintenance". Therefore, AO directed the assessee to submit along with documentary evidences, the details of addition to factory premises, nature of repairs & maintenance. Assessee was also directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, reduces to as to whether a certain proportion of the expenditure on extensive repairs and renovation could be allowed as towards current repairs even though it was spent in the regular course of the renovation. 5. The AO further observed as under:- 3.11 From the perusal of the ledger of "building repair", it is clear that what assessee has capitalized is merely the cost of concrete and steel (that is also not entirely) while the rest of the expenses have been debited under the head current repair and claimed as revenue expenditure even though they-were incurred for the same renovation wherein the concrete and steel was used. 3.12 Thus as per assessee, the cost of civil work was capitalized while the rest constituted current repair. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... premises usable for a longer duration. There was enhancement in capacity and efficiency of the premises. It was not merely for restoring the premises to its original condition but definitely it had brought new advantage. Therefore, the AO is correct in treating the expenditure incurred for works inside the buildings also as capital expenditure. However, the AO had not examined item wise expenditure to classify the same as capital or revenue expenditure. He has treated the entire expenses under a particular ledger account as capital expenditure. It is also apparent that the expenses related to routine repairs and maintenance are also debited in those ledger accounts which are definitely revenue expenditure and the appellant should get the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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