Deb, J. - (1.) The following question is involved in this reference under Section 66(1) of the Indian I.T. Act, 1922 : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the entire expenditure incurred by the asssessee on its office premises at Bombay amounting to Rs. 3,41,130, Rs. 4,70,000 and Rs. 7,88,286 in the assessment years 1958-59, 1959-60 and 1960-61, respectively, was revenue expenditure and allowable as such in each year ? " We will refer to the assessee as the company. The " Crescent House " at Bombay was built in 1938. It was purchased by the company for using it as its Bombay office. It was repaired in the relevant accounting years. The ITO disallowed the amounts mentioned in the question spent by the company for repairing the "Crescent House ".
(2.) Three appeals for the aforesaid three years were filed by the company. One of them was allowed by one AAC. Two other appeals were dismissed by another AAC. The parties then went to the Tribunal. A consolidated order was passed by the Tribunal in all those appeals.
(3.) The relevant facts found by the Tribunal may now be briefly stated. At the time the company purchased the "Crescent House" for Rs. 15.5 lakhs there was no sign of its external deterioration. In 1956 the company discovered that the building was severely damaged. It was surveyed by architects and engineers. They opined that extensive repairs were absolutely necessary and advised that concrete works, some columns and beams should be plastered with cement by the process of guniting in order to prevent further deterioration and corrosions. The company carried out the repairs under the supervision of Mr. B.K. Banerji, an engineer, by incurring the aforesaid expenditure without creating any additional space. No remodelling was done nor any structural alteration was made. Some columns and beams were plastered with cement by the process of guniting. The repairs were made to preserve and maintain the building and to prevent further deterioration and corrosions as far as possible. The condition of the building was not improved from its original condition, nor its original life was extended by those repairs although there was a new look to the repaired portions.;