Renovation & Repairing Expenditure

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Shirish Kumbhar (Querist)
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12 June 2009 What is the case laws available relating to the renovation and repairs in fixed assets.

Basic principles as decided in case laws?

when expenditure is to be treated as repairs OR renovation and to be write of vs to be capitalisation

Please provide full text of the case if possible.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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13 June 2009 Answer to third para of your query is as follows:-
1)In deciding whether a particular expenditure is capital or revenue in nature what has to be seen is whether the expenditure in question was incurred to create any new asset or was incurred for maintaining the business of the assessee.
Citation:- Dalmia Jain & Co Ltd Vs CIT (1971) 81 ITR 754(SC)
2) If the expenditure is made for acquiring or bringing into existence an asset or advantage for the enduring benefit of the business, it is properly attributable to capital and is of the nature of capital expenditure. Citation:-Assam Bengal Cement Co Ltd Vs CIT (1955) 27 ITR 34 (SC).

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