This is departmental appeal on following grounds:- "On facts and in circumstances of case, ld. CIT (A) was not justified in: deleting addition of Rs. 20,000 made by ITO on account of expenditure incurred by assessee which is in nature of capital expenditure; and deleting addition of Rs. 4,77,000 made by ITO as "Income from other sources." So far as ground no. 2 is concerned, only reason given by ITO to assess profit of Rs. 4,77,000 made on sale of house under head 'income from other sources' was that house did not stand registered in name of assessee vendor, and so he was not its full owner and so, according to him, profit arising from sale of said property could not be subjected to capital gains tax and, in his opinion, it could be assessed only under head 'income from other sources. On appeal ld. CIT(A) did not agree with above finding of ITO and he directed that as asset in question was capital asset of assessee, income from sale thereof ought to be assessed under head 'Capital gains' and in as much as assessee had purchased another capital asset residential house at E-80, Greater Kailash, Part-I, New Delhi vide sale deed dt. 25th March, 1981 for total consideration of Rs. 12,21,000 jointly with his wife and son, necessary relief to assessee under s. 54 may be given. In view of above directions, he deleted addition of Rs. 4,77,000 under head 'income from other sources'. It is against above finding of ld. CIT (A) that present appeal has been filed by Revenue. After hearing both sides we are of view that there is no merit whatsoever, in departmental stand. Sec. 45 of IT Act, 1961, does not refer to ownership criterion with regard to transfer of capital asset. All that has to be seen is whether what has been transferred by assessee is capital asset or not. interest of assessee in aforesaid house for which he had paid full amount and of which he was in rightful possession, did constitute capital asset of assessee and, therefore, on its transfer gain which arose to him was capital profit, and was assessable under head 'capital gains'. It could never be assessed under head 'income from other sources', for, it is not income, but for statutory provision that capital gain be also treated as income and be assessed to tax, such receipt will not be subject to income tax. Ground No. 2 of Revenue, therefore, stands rejected. facts giving rise to ground no. 1, have been stated by ITO in his order as follows: "A sum of Rs. 89,200 has been claimed on repairs and renewals as against Rs. 34,100 claimed last year. abnormal increase in these expenses has been explained by assessee in his letter dt. 29th Feb., 1984 and is stated to be on account of redoing wooden wall panels and partitions, etc. which are stated to have become obsolete due to wear and tear and having been damaged by termites. After considering explanations of assessee and keeping i n view fact that by redoing wooden panels assessee has acquired assets of enduring nature, claim of assessee cannot be allowed in toto. I estimate cost of these wooden panels at Rs. 20,000 in absence of exact information to this effect. Depreciation at appropriate rate will be allowed". Against above finding of ITO assessee went in appeal to CIT (A), and pleaded before him that expenditure in question was revenue expenditure, as it did not bring into existence any capital asset of enduring nature and that assessee was not owner of premises in question and, therefore, as result of aforesaid expenditure, no asset of enduring nature came to existence. CIT (A) accepted above explanation and following judgment of Hon'ble Delhi High Court in case of Instalment Supply Pvt. Ltd vs. CIT (1984) 40 CTR (Del) 313: (1984) 140 ITR 52 (Del) allowed amount in question. ld. Departmental representative submits that CIT (A) did not take into account provision of sub-s. (1A) of s. 32 of IT Act, 1961, and if he had taken that into account, he would not have given finding that he gave, because expenditure in question was definitely in relation to capital asset and purpose of expenditure was to improve said capital asset. judgment of Hon'ble Delhi High Court in case of Instalment Supply Pvt. Ltd. (supra) pertained to year in respect of which s. 32 (1A) was not on statute book and so their Lordships did not have to consider, impact of that section on expenditure. On behalf of assessee aforesaid submission is kly opposed and order of CIT(A) is supported. Sub-s. (1A) of s. 32 was inserted by Taxation laws (Amendment) Act, 1970 w.e.f. 1st April, 1971 and read, inter alia, as below: "Where business or profession is carried on in building not owned by assessee but in respect of which assessee holds lease or other right of occupancy and any capital expenditure is incurred by assessee for purposes of business or profession after 31st day of March, 1970, on construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, building, then, in respect of depreciation of such structure or work, following deductions shall,........be allowed." From bare reading of aforesaid sub-section, it is clear that, if any capital expenditure is incurred on construction of any structure or doing of any work by way of renovation or extension of, or improvement to building, such expenditure would be capitalised and depreciation would be allowed thereon even though property did not belong to assessee, expenditure on renovations be of capital nature. If it is merely replacing dilapidated wall or white ants riddled wooden panel, it would not be capital expenditure, it would be mere repair. In present case, what assessee has done, is to replace white antse eaten wooden panel by new wooden panel. This is, as if wall of cement moder had become weak and had, therefore, to be replaced by another wall of same type. Such replacement would not be capital expenditure, whether be with reference to one's own asset or with reference to leased out asset. ld. CIT(A) was in our opinion, correct in not accepting ITO's version and in holding that expenditure in question was of revenue nature, hence allowed. We therefore, uphold order of learned CIT(A) on this point. In result Department's appeal stands dismissed. *** INCOME TAX OFFICER v. AMRIT NARAIN