Dy. CIT v. Kalyanpur Cements Ltd.

INCOME TAX ACT, 1961

--Capital or revenue expenditure--Major repair expensesReplacement of gearboxes--Assessee, a Private Limited Company, was engaged in the business of manufacturing and selling of cement. In addition to current repairs, it had claimed deduction of major repair expenses on account of replacing gearboxes as revenue expenditure on the ground that the replacement of the gearboxes was necessary to keep the plant in running condition as the old gearboxes were completely worn out. AO disallowed deduction on the ground that such expenses were enduring in nature, so, it could not be claimed as deduction by showing as revenue expenditure. Held: Following the decision of Tribunal in assessee's own case for assessment year 2007-08, major repair expenses on account of replacement of gearboxes to keep the plant in running condition were allowed as revenue expenses.