TMI Blog2024 (2) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, it is clarified that in respect of repairs made on road, such expenditure would be allowable since the assessee is not the owner of roads, outside its premises. We, therefore, set aside the impugned order and restore the issue to the file of AO for verification of the correctness of the claim of the assessee. Ground is allowed for statistical purpose. - SHRI NARENDRA KUMAR BILLAIYA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER For the Assessee : Shri Ved Jain, Adv., Ms. Uma Upadhyay, CA. For the Department : Shri Ajay Kumar Arora, Sr. DR. ORDER PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals)-6, New Delhi, dated 24.04.2019, pertaining to the assessment year 2014-15. The assessee has raised following grounds of appeal: 1. That the learned CIT(A) has erred in law and facts by not quashing the order and therefore the Id.AO should be directed to accept returned Income. 2. That the learned CIT(A) has erred in law and facts by confirming the action of the Ld. AO of treatment of capital expenses out of repair and maintenance and Stores Consumed of Rs 45,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... store spare consumed were directed to be capitalized and depreciation thereon @ 15% was allowed. Aggrieved by the order of learned CIT(A) the assessee is in appeal before this Tribunal. 3. Ground nos. 1 5 are general in nature and need no separate adjudication. Ground no. 4 is premature, hence dismissed. Ground no. 3 is not pressed and stands dismissed accordingly. 4. The only ground that survives for adjudication is ground no. 2. Apropos to ground no. 2 learned counsel for the assessee submitted that the lower authorities failed to appreciate the fact that the expenditure would fall in the category of revenue expenditure as it relates to routine maintenance and repairs. The learned CIT(A) out of the total expenditure directed a sum of Rs. 27,69,627/- on account of repair maintenance and Rs. 17,48,184/- on account of stores and space consumed to be capitalized. However, learned CIT(A) allowed depreciation on this sum @ 15%. He reiterated the submissions as made in the written synopsis. For the sake of clarity the synopsis of the assessee is reproduced as under: 1. This is an assessee appeal filed against the order dated 24.04.2019 passed by CIT(A) confirming disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee by incurring the expenditure. Findings are as under.- 6. The narration of the facts and the findings recorded by the income tax authorities and the Tribunal as above would clearly show that it has been factually found by the Tribunal that no new asset or enduring advantage was obtained by the assessee by incurring the expenditure. No extra capacity or space was created in the factory by repairing the roof and the floor. These are findings of fact recorded on the basis of the material on record and those findings have not been challenged or shown to be perverse or based on no material. Having regard to the well settled position that unimpeached findings of facts do not give rise to any substantial question of law, we find no merit in the appeal filed by the revenue which is dismissed with no order as to costs, - Further reliance can also be placed in the case of CIT v. M/s MAC Charles (India) Ltd. ITA No. 488/2009 dated 17.11.2014 wherein Hon'ble Karnataka High Court held that 9. Merely because the income of the hotel has increased, it does not necessarily follow it is because of the refurnishing or repair work done to the hotel rooms. That may be one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure as the repairs were done to preserve and maintain an already existing asset and to improve its longevity. There was no new assets created by the assessee. Therefore, CIT(A) as well as the Assessing Officer was not right in making disallowance of current repairs out repairs maintenance of building. Thus, appeal of the assessee is allowed. Reliance in this regard can also be placed on the following judgements as well- M/S. INFOSYS LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3 (1) (1) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 3 (1) ((1), BANGALORE, 2022 (11) TMI 1316 Dated 30.11.2022 NORMA INDIA LTD. V. ACIT ITA NO. 1971/DEL/2014 DATED 29.06.2016 ITAT DELHI DY. CIT V. IKEA TRADING (INDIA) PVT. LTD. ITA NO. 5393/DEL/2010 DATED 02.06.2016 ITAT DELHI DCIT V. AHMEDABAD PACKAGING INDUSTRIES LTD. IT . 2375/AHD/2013 DATED 11.05.2017- ITAT AHMEDABAD SARANG AND ASSOCIATES V. DCIT ITA NO. 1961/MUM/2015 DATED 24.11.2016- ITAT MUMBAI ABM STEELS PVT. LTD. V. ACIT ITA NO. 1855/AHD/2011 DATED 24.04.2015 9. That no new assets come into existence and nothing has been brought on record by the AO as well as CIT(A) which prove that a new asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pack system replaced 09.08.2013 Jalaram Enterprises 3,81,755/- Brick flooring at new useable storage yard. 09.12.2013 Jalaram Enterprises 2,77,991/- Civil work for new room extension otla 13.01.2014 Nagar Palica Valsad 2,50,000/- For road from NHS to water works 28.11.2013 Jalaram Enterprises 2,31,161/- Civil work and electrification for covered shed Total 27,69,627/- 4.3.3 Further, from the details regarding store spare consumed amounting to Rs. 23,50,784/-, the following items appear to be capital in nature: Account name Date Vendor name Amount Remarks Store and spare expenses 31.07.2013 Shivam S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a business expense, but if the lump sum payment brings in a capital asset, then that puts the business on another footing altogether. 3. Whether for the purpose of the expenditure, any capital was withdrawn, or, in other words, whether the object of incurring the expenditure was to employ what was taken in as capital of the business. Again, it is to be seen whether the expenditure incurred was part of the fixed capital of the business or part of its circulating capital. 6.2 Looking to the nature of expenditure made by the assessee it is seen that there are replacement of the entire components and laying of roads etc. Therefore, in our considered view the AO ought to have verified the correctness of the claim that it is purely for the routine upkeep of building and plant machinery and not for major repairs which brought enduring benefit to the assessee. Thus, in the absence of clear finding about the nature and extent of repairs treating the expenditure as capital is not justified. However, it is clarified that in respect of repairs made on road, such expenditure would be allowable since the assessee is not the owner of roads, outside its premises. We, therefore, set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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