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9. The Tribunal has rightly considered the expenses as Revenue in nature. In the light of the above, no substantial question of law arises. The appeal as such is dismissed. No costs."

18. Then we turn to the case laws relied on by the Ld. DR. In Ballimal Naval Kishore (supra), the assessee carries on the business of exhibiting films in a theater called "Naval Talkies" at Panipat. He had purchased the said building in 1937. It was a ginning factory then. He ran the factory till 1940. In the year 1945, he converted it into a cinema theater and was exhibiting films therein. During the period 1960 to March 1961, the assessee extensively repaired the theater by expending substantial amounts. The amount spent by him are: on ITA No 3775 & 4214/Mum/2016 20 UHDE India Pvt. Ltd.

machinery Rs.16,002/-, new furniture Rs.27,889/-, sanitary fittings Rs.5,225/- and replacement of electrical wiring Rs.13,604/-. In addition thereto, a total amount of Rs.62,977/- was spent on extensive repairs to walls, to the hall, to the flooring and roofing, to doors and windows and to the stage sides etc. Actually, the theatre had to be closed during the aforesaid period for effecting the repairs. In the assessment proceedings, relating to the assessment year, the assessee claim deduction of the aforesaid amount of Rs.62,977/-. The Income Tax Officer disallowed the same considering it as capital expenditure. On appeal, the Hon'ble Supreme Court held that :

In our opinion the test involved by Chagla C.J. in New shorrock Spinning & Manufacturing Company Limited is the most appropriate one having regard to the context in which the said expression occurs. It has also been followed by a majority of the High Courts in India. We respectfully accept and adopt the test.

Applying he aforesaid test, if we look at the facts of this case, it will be evident that what the assessee did was not mere repairs but a total renovation of the theatre. New machinery, new furniture, new sanitary fittings and new electrical wiring were installed besides extensively repairing the structure of the building. By no stretch of ITA No 3775 & 4214/Mum/2016 22 UHDE India Pvt. Ltd.

ITA No 3775 & 4214/Mum/2016 25 UHDE India Pvt. Ltd.

"The expenditure was incurred towards false ceiling; fixing tiles/flooring; replacing glasses; wooden partitions; replacement of electrical wiring; earthing; replacement of G.I. Pipes, plumbing and sanitation lines; plaster and painting of walls. A premises, it may be appreciated, is constituted not merely by, or only of, civil structure, in as much as the same by itself does not render it functional for the stated purpose of its user. In fact, the impugned expenditure includes labour for civil work also, so that the work could possibly include some structural changes as well. The issue involved, thus, reduces to as to whether the expenditure on extensive repairs and renovation could be allowed in respect of a tenanted premises. The same can by no means be regarded as 'current repairs', the ambit of which is fairly restricted, denoting a repair that is required to be attended to as soon as the need for it arises. 'Repairs', though a term of wider scope, yet cannot extend beyond that of the term itself. A repair, by definition, is towards the maintenance and preservation of an 'existing' asset. Surely, the advantage or asset, in terms of its functional utility and capacity for the business, needs to be maintained, so that expenditure for retaining the same is essentially revenue expenditure, which, again, by definition, does not lead to or result in an enhancement or improvement. The premises in the instant case was admittedly not in use for a long time and, thus, in a dysfunctional, if not dilapidated, state prior to it being acquired by the assessee. The expenditure incurred on refurbishment and renovation of an old premises, in an inoperable state, so as to make it fit for use. It cannot be classified as 'repairs'; since expenditure was incurred to render it in a functional state and, therefore, is clearly in the capital field. The ingredients and prerequisites of a capital expenditure would remain the same, and not undergo any change depending on the object matter of the expenditure, i.e., whether an owned or leased premises, and which itself is the premise of Explanation 1 to section 32(1)(ii), invoked by the revenue. [Para 6] The concept of 'repairs' and 'revenue expenditure' were considered as pari materia and co-extensive in as much as in the view of the Court, repair could not, by definition, include capital expenditure. [Para 6]"