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2020 (7) TMI 688 - MADRAS HIGH COURTNature of expenditure - expenditure incurred in the renovation and redecoration of rooms in a hotel - capital expenditure or revenue expenditure - appellant is engaged in the business of running a three star hotel - HELD THAT:- Revenue does not dispute the fact that the number of rooms in the assessee’s hotel remained at 57 and that there was no increase in the number of rooms and only 18 rooms out of 57 rooms were renovated and repaired - assessee specifically contended that the renovation and repairs neither increases their capacity nor does it empower to revise the basic room tariff because it can be done only after considering further facts such as market condition remaining in Madurai City and with the concurrence of M/s.ITC Limited, as they only have a franchisee agreement with the assessee. Granite and marble used by them will not last long and there is no guarantee and they may develop cracks and lose their shine and even become obsolete in a couple of years. These facts were never disputed before the Assessing Officer or before the CIT(A). As rightly contended by assessee,Tribunal did not consider the issue, but was of the opinion that it was neither the case of the assessee nor that of the Revenue that the claim was for current repairs. Assessment is for the year 2012-13 and the facts are not in dispute. It is only an application of legal principle to the given facts. Therefore, we hold that there is no justification in remanding the matter to the Tribunal or to any other Lower Authority. We hold that the expenditure incurred by the assessee is a revenue expenditure and not a capital expenditure. - Decided in favour of assessee.
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