IN THE HIGH COURT OF DELHI AT NEW DELHI 
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   ITA 509/2012  
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 CIT               ..... Appellant 
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 Through: Mr. Deepak Chopra, Sr. Standing Counsel. 
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 versus 
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 BHARAT GEARS LTD            ..... Respondent 
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 Through: 
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 CORAM: 
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 HON'BLE MR. JUSTICE S. RAVINDRA BHAT 
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 HON'BLE MR. JUSTICE R.V.EASWAR 
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 O R D E R 
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       03.09.2012 
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 The appellant is aggrieved by the order of the ITAT dated 
 23.03.2012 in ITA No.1787/Del/2011.  The question of law sought to be 
 urged is the correctness of the order of the CIT(A) directing deletion of 
 the allowance to the extent of `35,88,652/- originally disallowed by the 
 AO, under the head of ?current repairs of plant and machinery?. 
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 The facts are that inter alia the assessee had, for the relevant 
 assessment year 2007-08 claimed expenditure incurred on current repairs 
 of plant and machinery to the extent of `38,00,000/-.  The Assessing 
 Officer held it to be capital expenditure and added back the same to the 
 income but at the same time granted depreciation of 15%.  The assessee 
 appealed to the CIT (Appeals) who deleted the disallowance.  The CIT 
 (Appeals) did note all the previous year?s assessment in this regard and 
 its own order in ITA No.1600/2010 one of which was confirmed by the 
 Tribunal on 03.06.2011.  The Tribunal confirmed the order of the CIT 
 (Appeals) following the previous decision dated 03.06.2011 (in ITA 
 No.1600/2010 and 1670/2010), stated as follows: - 
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 ?8. Regarding Income Tax Act No.14/2005 Hon?ble High Court observed 
 that where the expenditure  was for the purpose of securing a benefit of 
 enduring nature and even if technically, new asset has not come into 
 existence or the capacity of the overhauled machine after reconditioning 
 was not enhanced, the fact remains that after prolonged use, this machine 
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 was lying idle in a broken down condition, totally unfit for the production.  Therefore, by subsequent reconditioning carried out had 
 resulted in imparting useful life to old and unfit machinery.  This 
 resulted into a benefit of enduring nature.  This benefit of enduring 
 nature would be very much in the capital field.  In so far as alternate 
 submission of the assessee is concerned that also does not cut ice in 
 this favour, with the above observation, Hon?ble High Court concluded 
 that the expenditure incurred by the assessee in Assessment Year 1994-95 
 was of enduring nature, giving a new life to idle machine.  Therefore the 
 revenue rightly held it as expenditure capital nature and in the result, 
 the appeal of the assessee was dismissed. 
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 9. In the second part of the order of the Hon?ble High Court the 
 appeals filed by the Revenue were also dismissed with the observation 
 that form Assessment Year 1995-96 to Assessment Year 2004-05, similar 
 expenses were allowed by the ITAT Delhi Bench as revenue in nature and 
 all these orders were accepted by the department.  As there as no appeals 
 from the Revenue against the order of the ITAT pertaining to above 
 Assessment Year therefore Hon?ble High Court further observed that in 
 respect of Assessment Year 2005-06 and 2006-07 the expenditure of same 
 nature incurred on current repairs for which deduction would be 
 admissible u/s 31 (i) of the Act, it is not capital expenditure but 
 revenue expenditure nature incurred for business purpose which would 
 qualify as deduction u/s 37 of the Act as well.  Therefore the appeals of 
 the Revenue were also dismissed.? 
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 This Court has considered the submissions and materials on record 
 as well as the previous judgment in ITA No.14/2005, 1600/2010 and 
 1670/2010 the position at least as far as in law with regard to the 
 expenditure has remained unchanged.  It does not confer a material 
 advantage as held by the Assessing Officer in this case.  Consequently 
 this Court is of the opinion that the reasoning which persuaded this 
 Court in ITA No.1600/2010 and 1670/2010, has to prevail.  There is no 
 infirmity with the Tribunal?s order.  The appeal is therefore, dismissed. 
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 S. RAVINDRA BHAT, J 
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 R.V.EASWAR, J 
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 SEPTEMBER 03, 2012/hs 
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 $ 44 
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