Law: Income Tax Act, 1961

Section: 30(a)(ii)

(a) Income-tax----Business income---Deductions---Repairs---"Current repairs"---Meaning of--¬Repairs and renovation of administrative block of assessee's building, like replacement of floor long overdue---Not current repairs---Not allowable as deduction as such---Indian Income Tax Act, 1961, S. 30(a)(ii). One of the ingredients of an amount being allowed as a deduction under section 30(a)(ii) of the Income Tax Act, 1961, is that the amount must be spent for purposes of carrying out "current repairs". An amount spent in carrying out repairs which were long overdue cannot be said to be spent on "current repairs". Section 30(a)(ii) is not concerned with the question as to whether the nature of the repairs is capital or revenue. As long as the repairs which are carried out fall under the category of current repairs, irrespective of the fact that the repairs have been carried out to a capital asset and may otherwise have been regarded as capital expenditure, the section specifically allows deduction. Current repairs must necessarily mean repairs which are required to be carried out from time to time as and when a defect arises. If there has been wear and tear on an item, like the floors of a building, over a number of years and ultimately they are replaced, then such replacement cannot be regarded as current repairs . Held accordingly, that the amount spent by the assessee towards cost of marble, charges for cutting stones, wages and polishing and fixing of stones, in repairing and renovating its administrative block was not deductible as current repairs under section 30(a)(ii). (b) Income-tax--- ----Business expenditure---Building taken on lease for limited period--¬Expenditure to fix false ceiling, for painting and making some structural changes---Finding that expenditure was incurred for facilitating carrying on of business---Expenditure deductible---Indian Income Tax Act, 1961, S. 37(1). The assessee had taken two adjacent flats in a building on rent initially for a period of 11 months but renewable for 10 periods of 11 months each. The flats were renovated by the assessee incurring expenditure on items like fixing false ceiling, painting, making some structural…

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