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| The Tax Publishers2020 TaxPub(DT) 3402 (Del-Trib) : (2020) 083 ITR (Trib) 0436 INCOME TAX ACT, 1961
Section 37(1)
Where in relation to repairs claimed by assessee, bills for expenses indicated that amount was for repairs, supply of consumables, recalibration of the machinery and it was not case of revenue that by incurring of expenditure any new asset came into existence as repairs was for preserving and maintaining an already existing asset, therefore, same could not be treated as capital in nature.
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Business expenditure - Capital or revenue expenditure - Repairs expenses preserving and maintaining an already existing asset -
Assessee-company was engaged in the business of civil construction contracts. Issue was as regards disallowance of expenses incurred towards repairs, which were claimed to be towards comprehensive repairs of machinery. Assessee contended that same were not capital in nature as alleged by revenue. Assessee produced copy of invoice and stated that no new machinery came into existence. Held: Bills for expenses indicated the amount to be for the repairs, supply of consumables, recalibration of the machinery. It was not case of revenue that by incurring of expenditure any new asset came into existence as repairs was for preserving and maintaining an already existing asset. Therefore, addition was set aside.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
INCOME TAX ACT, 1961
Section 40(a)(ia) read with Section 194C
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