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Madras HC explains principles when repairs is current and when non current
Case Law Details
- Case Name
- M/s. Super Spinning Mills Ltd. Vs The Assistant Commissioner of Income-tax (Madras High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Madras High Court
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The question as to whether the expenditure incurred on replacement of machinery is revenue or capital expenditure, particularly in the nature of replacements of parts, thus rests on the nature of expenditure incurred, vis-a-vis the benefit that the assessee derives. The ratio deductible from the decisions referred to above are:
(i) To decide the applicability of Section 31(i), the test is not whether the expenditure is revenue or capital in nature, but whether the expenditure is “current repairs”. The basic test is to find out whether expenditure is incurred to “preserve an...
