2010 (11) TMI 391

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..... appeal was admitted on 21-11-2006, for determination of the following substantial question of law: "Whether on an application of the correct principles of law, was the Tribunal legally correct on the facts in the circumstances of the case, in holding that the expenditure incurred by the assessee-company on the repairs of the building was capital expenditure?" 3. In brief, the facts necessary for adjudicating the appeal are that during the assessment year under consideration, the assessee-appellant incurred an expenditure of Rs. 6,04,886 carrying out renovation in its building so as to bring it within the ambit of quality standard ISO-9002. The Assessing Officer treated the said amount as capital expenditure as the assessee had derived end .....

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..... axman 597 (Bom.);    8.  CIT v. Khimline Pumps Ltd. [2002] 125 Taxman 104 (Bom.);    9.  CIT v. Laxmi Talkies [2006] 151 Taxman 99 (Guj.);  10.  CIT v. Dasaprakash [1978] 114 ITR 210 (Mad.);  11.  CIT v. Ooty Dasaprakash [1999] 237 ITR 902/[2000] 110 Taxman 275 (Mad.);  12.  B and A Planatation & Industries Ltd. v. CIT [2000] 242 ITR 22/[2001] 117 Taxman 323 (Gauhati);  13.  CIT v. Porrits & Spencer (A) Ltd. [2002] 257 ITR 49/124 Taxman 155 (Punj. & Har.);  14.  CIT v. Lake Palace Hotels & Motels (P.) Ltd. [2002] 258 ITR 562/[2003] 131 Taxman 836 (Raj.)  15.  Assam Bengal Cement Co. Ltd. v. CIT [1955] 27 ITR 34 (SC). 7. On the other hand, lear .....

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..... ffect from 1-4-1988 does not conform to the legal position. Explanation I that has been appended below section 32 of the Act with effect from 1-4-1988 reads as under: 'Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purpose of the business or profession on the 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, the building, then the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee.' According to the aforesaid explan .....

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