P.C. Jain, J.
1. In this reference application, the following question of law has been referred for the opinion of this court :
'Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the expenditureof Rs. 31,108 incurred by the assessee on replacement of tin shed was revenue expenditure and admissible under the Income-tax Act, 1961 ?'
2. Briefly stated, the facts of the case are that the assessee is a firm which crushes oil seeds and produces oil, khal, etc. It has its own tin shed factory stores and the boiler situated in the premises was owned by the firm. Daring the accounting year ending on July 22, 1970, corresponding to the assessment year 1971-72, the tin sheds were blown off on account of storm. Consequently, the firm incurred an expenditure of Rs. 31,108 in replacing the roof. During the course of assessment proceedings, the assessee claimed the aforesaid expenditure as being current repairs and requested deduction thereof. The assessing authority did not agree with the contention of the assessee and held the expenditure to be of capital nature and accordingly capitalised it and allowed depreciation thereon. The assessee went in appeal before the Appellate Assistant Commissioner but the appeal was also dismissed on similar grounds. The assessee further preferred an appeal before the Income-tax Appellate Tribunal and contended that the said expenditure was incurred as part of its profit-earning process and not for enduring benefit or advantage. It was contended that the expenditure was either allowable as current repairs or under Section 37 of the Act. The learned Tribunal accepted the aforesaid contention of the assessee. The Revenue moved an application before the Tribunal for making a reference to this court after framing the aforesaid question of law.
3. The learned counsel for the assessee submitted that the expenditure incurred was an integral part of profit-earning process. It was 'also submitted that the tin shed did not last for more than two to three years and, as such, it was a sort of recurring expenditure which cannot be said as tantamounting to acquisition of an asset or a right of a permanent character. The learned counsel placed reliance on Hanuman Motor Service v. CIT : 66ITR88(KAR) , CIT v. Mahalakshmi Textile Mills Ltd. : 66ITR710(SC) , Guntur Merchants Cotton Press Co. Ltd. v. ITO : 108ITR620(AP) and Permali Wallace Ltd. v. CIT : 151ITR43(MP) . In the aforesaid cases, it was held that the repairs carried out by the assessee would not strictly come under the purview of renovation and that the expenditure was allowable as revenue expenditure. In the case of CIT v. Mahalakshmi Textile Mills Ltd. : 66ITR710(SC) , the Hon'ble Supreme Court observed that the current repairs to the plant and machinery is an allowable expenditure. On the basis of the aforesaid authority, we hold that the expenditure incurred by the assessee in the form of replacement of tin shed was a revenue expenditure and admissible under the Income-tax Act, 1961. Our answer to the reference is, therefore, in the affirmative, i. e., in favour of the assessee and against the Revenue.