TMI Blog1981 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... five textile mill units and a dye works, with a capacity of over 2,00,000 spindles and over 600 looms. In the weaving sheds of mills Nos. 2, 3 and 4 and in the folding, sizing and drawing depts. the assessee-company replaced ordinary lighting by fluorescent tubes, incurring an expenditure of over Rs. 2,15,000 for the purpose. According to the ITO, this expenditure brought to the assessee an advantage of enduring nature and it was of a capital nature. The AAC agreed with the view taken by the ITO. The matter was carried to the Income-tax Appellate Tribunal, and the Tribunal upheld the contention of the assessee, holding that this was revenue expenditure covered by s. 10(2)(xv) of the Indian I.T. Act, 1922. However, the claim for allowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee. It is from the decision of the Tribunal that five questions have been referred to us by the ITO : " (1) Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 2,16,045 incurred by the assessee-company on replacement of ordinary lighting by fluorescent lighting is deductible as revenue expenditure under section 10(2)(xv) of the Indian Income-tax Act, 1922, or as revenue repairs under section 10(2)(v) of the said Act ? (2) Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 18,506 incurred on the substitution of old worn out doors by fire-proof doors is admissible as deduction as 'current repairs' under section 10(2)(v) of the Indian Income-tax Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the expenditure bad brought the benefit of a larger life to the asset and better service would not make the expenditure capital in nature. Section 10(2)(xv) of the Indian I.T. Act, 1922, requires that the expenses must be laid out for the purpose of business of the assessee, and further that they should not be in the nature of capital expenditure. It is impossible to hold that the amounts have not been expended for the purpose of the business of the assessee. The learned counsel appearing for the Department, however, submitted that the expenses must be regarded as capital in nature. For this he relied on the largeness of the expenditure. He also disputed the approach of the Tribunal and submitted that by incurring this expenditure th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Act, 1922. Question No. 1 also will have to be answered in favour of the assessee. As regards questions Nos. 2 and 3, it is difficult to find anything to be said in favour of the Commissioner of Income-tax. These are obviously current repairs, and the Tribunal was right in allowing the same under s. 10(2)(v) of the Indian I.T. Act, 1922. In the result, the five questions referred to us are answered as follows : Question No.1 : Allowable under s. 10(2)(xv) of the Indian I.T. Act, 1922. In favour of the assessee. Question No. 2 : Allowable under s. 10(2)(v) of the Indian I.T. Act, 1922. In favour of the assessee. Question No. 3 : Allowable under s. 10(2)(v) of the Indian I.T. Act, 1922. In favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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