| COURT: | ITAT Delhi |
| CORAM: | H. S. Sidhu (JM), Prashant Maharishi (AM) |
| SECTION(S): | 30, 37(1) |
| GENRE: | Domestic Tax |
| CATCH WORDS: | capital vs. revenue expenditure, repairs |
| COUNSEL: | Ananya Kapoor, Salil Kapoor |
| DATE: | June 2, 2016 (Date of pronouncement) |
| DATE: | June 28, 2016 (Date of publication) |
| AY: | 2005-06 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| S. 30/ 37(1): Expenditure on repairs of rented premises, even if huge and accumulated, are allowable as revenue expenditure. Fact that CIT(A) admitted additional evidence is no justification for seeking a set aside to the AO if the CIT(A) called for a remand report from the AO: Savarana Spinning mills Limited 293 ITR 201 (SC) distinguished | |
The contention of the revenue that Hon’ble Supreme Court has held in CIT vs. M/s. Saravana Spinning Mills Pvt. Ltd. 293 ITR 201 pleading that the most of the expenditure are not in the nature of current repair expenditure but accumulated repairs so even though the expenditure is revenue in nature, same is not allowable. We find that the reliance on this decision by the revenue is misplaced as in that case, Hon’ble Supreme Court was concerned about the modernisation and replacement expenses on the textile mill and it was held that it was not allowable. In the present case, the issue is not of repairs on plant and machinery but related to expenditure on building, further the building is also not owned by the assessee but is a rented premises. The expenditure would be dealt with by the provision of section 30. On reading of the above section, the accumulated repairs are not allowed when the assessee owns building and therefore as a tenant cost of repairs to the premises is allowable whether they are accumulated or current
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