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Dcit, Madurai vs Pandyan Hotels Limited, Madurai on 16 October, 2017 cites

Commissioner Of Income Tax vs M/S.Pandian Hotels Ltd on 26 October, 2005

'3.3.1 The question is whether the expenses incurred by the appellant can be capitalised for the purpose of Income tax Act. As seen from the valuation report, the appellant has not disturbed the super structure and basic structure of the building. The appellant has carried out repairs and renovation in 6 rooms each at 2nd, 3rd, 4th floor. The nature of work carried out by the appellant have been explained in detail by the valuation officer in his valuation report. A perusal of the same shows the appellant has changed the flooring and replaced worn out doors and renovated the bathrooms and by incurring the above expenditure, the appellant did not increase the room capacity or create any new asset. The expenses have been incurred only to preserve the existing asset and the appellant had to renovate the old rooms in order to attract foreign customers and to maintain the standard of 3 star hotels and the appellant did not even increase the status of the hotel from 3 star to 4 star or 5 star. The AO held that the appellant derived benefit of enduring nature but this is not the sole test to be applied. The test of enduring benefit may fail on certain occasions and the correct test to see whether there is creation of any new asset. Admittedly, the appellant has not created any new asset 3 ITA No.1020/Mds/2016 (AY 2012-13) Dy. CIT v. Pandyan Hotels Ltd.
Madras High Court Cites 10 - Cited by 2 - P D Premkumar - Full Document

Commissioner Of Income-Tax vs Darbhanga Sugar Co. Ltd. on 11 April, 1957

(emphasis, supplied) The afore-stated test was endorsed and applied by the Hon'ble Apex Court in Ballimal Naval Kishore v. CIT [1997] 224 ITR 414 (SC), reproducing it, noting that the same had in fact been followed by the majority of the High Courts in India, and was, rather, in agreement with the view expressed earlier as well, as in CIT v. Darbhanga Sugar Co. Ltd. [1956] 29 ITR 21 (Patna) and CIT v. Sri Rama Sugar Mills Ltd. [1952] 21 ITR 191 (Mad).
Patna High Court Cites 7 - Cited by 20 - V Ramaswami - Full Document

Commissioner Of Income-Tax, Excess ... vs Rama Sugar Mills Ltd., Bobbili on 27 May, 1951

and sanitary fittings, i.e., other than the foundation and the existing superstructure, i.e., the RCC framework and masonary (brick) work, was dismantled and redone, with of course new materials. No wonder the same works to . 8 lacs per room. This, it is further noted, is on other than the expenditure on refurbishing the rooms, incurring expenditure on furniture, television and cable, carpets, air conditioning, telephone, electrical lamps, curtains, linen, etc., for which another substantial sum has been expended, working to . 3 to 4 lacs per room (para 2.5 of the VR). Now, it could not possibly be that all the rooms suddenly developed the need for repairs and refurbishing, which is, in any case, clearly a case of substantial replacement, i.e., of all their components - a total renovation. The expenditure is certainly and, in fact admittedly, notwithstanding that a part of a particular room or a particular room may require some replacement, incurred not for preservation and maintenance, but carrying improvement to all the rooms - in phases, with a view to upgrade the hotel at par with international standards. There is in fact no claim as to preservation or maintenance at any stage. It is a clear case of renovation; of substantial (if not total) replacement, so that it is not 'repairs' as explained in Sri Rama Sugar Mills Ltd. (supra). The account head 'building renovation expenses', under which the expenditure stands booked in accounts, thus, correctly describes the same, i.e., its nature. Phase-II of the modernization program, as planned, followed Phase-I, being in fact under progress at the time of inspection (for valuation) on 08.01.2014. The same may not have translated into higher revenue or yield, as sought to be emphasized by the ld. counsel during hearing, which depends on a variety of factors. Retaining the franchise; retaining or improving the market share (which would accrue only in future as the expenditure itself continues up to March, 2013 - the repair being followed by refurbishing); upgradation/improvement in facilities, are, in our view, definite advantages in the capital field.
Madras High Court Cites 20 - Cited by 43 - Full Document

Commissioner Of Income-Tax, Madras vs Mahalakshmi Textile Mills Ltd. on 12 March, 1964

Under section 31(i) the deduction admissible is only for current repairs. The afore, the question as to whether the expenditure incurred by the assessee conceptually is the revenue or capital in nature is not relevant for deciding question, whether such expenditure comes within the etymological meaning of the expression 'current repairs'. In other words, even if the expenditure is revenue in nature, it may not fall in the connotation of "current repairs".' It distinguished its' earlier decision in CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 (SC), explaining that if 'current repairs' was to be understood as including replacement, s. 31(i) will become completely redundant and absurdity will creep in because repair implies existence of a part of a machine which has malfunctioned, which is impossible in case of such replacement (pg. 209).
Madras High Court Cites 10 - Cited by 260 - Full Document

Commissioner Of Income Tax vs Ooty Dasaprakash on 12 February, 1998

Both the parties have relied on case law by the tribunal and the Hon'ble High Courts. We have, as would be apparent, relied on decisions by the Apex Court laying down the law in the matter, as well as by the said Court and the Hon'ble jurisdictional High Court applying the same in different fact settings, to decide the question arising in the present case, based on our factual findings, i.e., of the impugned expenditure as not answering the definitive test laid down for the purpose and, in fact, representing an improvement to the existing asset. We, accordingly, do not consider it necessary to distinguish individually the case law furnished, each of which we have though perused. For instance, in CIT v. Ooty Dasaprakash [1999] 237 ITR 902 (Mad), being by the Hon'ble jurisdictional High Court, there is, with respect, no finding as to the expenditure under reference answering the description of 'current repairs' as laid down in Ballimal Naval Kishore (supra) (which, as afore-noted, is the same as for repairs, as expounded in New Shorrock Spg. & Mfg. Co. Ltd. (supra)) or even to the earlier precedents by the Hon'ble jurisdictional High Court referred to in this order. It is, it may be appreciated, only the ratio decendi or the principle of law laid down which is binding.
Madras High Court Cites 2 - Cited by 28 - Full Document
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