Law:

Section:

Section 30 of the Income-tax Act, 1961 - Rent, rates, taxes, repairs and insurance for building - Assessment year 1967-68 - Assessee-company incurred certain expenditure on reconstruction of factory walls which had collapsed during rainy season - It also spent certain amount on replacement of old cement sheets which were found to be not quite serviceable - Assessee claimed deduction in respect of aforesaid expenditure under head 'current repairs' - ITO disallowed assessee's claim - AAC and Tribunal, however, partly allowed assessee's claim - Whether in view of fact that expenditure in question was incurred to preserve and maintain an already existing asset and not with a view to gain any new or fresh advantage, assessee was entitled to deduction as claimed - Held, yes FACTS For the relevant assessment year, the assessee company claimed deduction of certain amount on the ground that sum represented 'current repairs' of the factory. The ITO disallowed the entire claim of expenditure and repairs. On appeal, the AAC partly accepted the assessee's claim. He disallowed certain expenditure holding that said amount represented replacement of two iron girders and new roofing to the engine hall. The other item which was disallowed represented reconstruction of the walls which had collapsed during the rainy season of the year. Against said order the assessee filed a revision petition under section 264, which was also dismissed by the Commissioner. On writ : HELD In the instant case it could not be said that if the compound walls had collapsed on account of heavy rains during the accounting year that repairs effected to them were accumulated repairs, or, in other words, the assessee slept over the matter for years without attending to the repairs which the walls required. Even if minor repairs had been effected to the walls, they could not have withstood heavy rains. It was not the case of the revenue that there were no heavy rains in the accounting year or the walls did not collapse on account of heavy rains. Thus, it could not be said that repairs effected to the walls were not 'current repairs'. The other repairs related to the replacement of the old cement sheets.…

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