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TMI Blog2012 (6) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... inued till 31.3.1995 as the Assessing Officer himself had allowed business expenses till that date. - the assessee had to spend "demolition charges" in respect of structure that had caught fire and for which major repair was undertaken. - Therefore, the "demolition charges" and the "repairing charges", were held to be admissible to the assessee. - Decided in favor of assessee. - IT APPEAL No. 563 of 2005 - - - Dated:- 3-5-2011 - Adarsh Kumar Goel, Ajay Kumar Mittal, JJ. Ms. Savita Saxena for the Appellant. Mukand Gupta for the Respondent. ORDER Ms. Ajay Kumar Mittal, J. This order shall dispose of ITA Nos. 563 of 2005 and 421 of 2006 as the issues involved in both the appeals are common. For brevity, the facts are b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was completed on 11.3.1998. Addition of Rs. 3,31,645/- was made under the head "Demolishing Charges" as these expenses were not allowable under Section 37 of the Act. Further, addition of Rs. 2,13,094/- was also made under the head "Repair of Building" as these expenses were incurred on construction of boundary wall and being of capital nature, the same were disallowed under Section 37(1) of the Act. The assessment was completed at an income of Rs. 4,41,098/- which was other than long term capital gain. The Assessing Officer determined the long term capital gains at Rs. 11,36,520/- by taking the fair market value of the capital asset at Rs. 60/- per square yard as on 1.4.1981 as against Rs. 350/- per square yard claimed by the assessee. Fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinda in the year as it was the rate prevailing in the adjoining land. The Tribunal while rejecting the contention of the department in para 4 of its order had recorded as under:- "4. On this issue, the A.O. estimated the fair market value of the land at Rs.60/- per sq. yard as on 1.4.1981. It was stated that the A.O. has erred in stating that the distance between Samrat Hotel and the land sold shall be more than 1 K.M. and that the A.O. has erred in not accepting the fact that Shri Amrik Singh Road was a better developed commercial area than the area adjoining Samrat Hotel in 1981. It was also submitted that the A.O. should have accepted the value of the land @ 350/-per sq. yard as on 1.4.1981 as is shown by the assessee. It was submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he land sold by the Improvement Trust on enhanced rate @ Rs. 329.55 was also explained before the CIT(A). It was also explained from purchase deed of the land from the Improvement Trust on 1.6.1981 that the land was sold at Rs. 809/- per sq. yard. The CIT(A) considering the facts and material available on record was of the view that in the case of Samrat Hotel, the departmental valuer has valued the land at Rs.300/-per sq. yard and that it is factually correct that the mill of the assessee was located on both the Railway Road as well as Amrik Singh Road and the mill itself was near to Samrat Hotel. The distance is not more than 1 Km. The CIT(A) considering the material on record and comparable cases estimated the rates for the purpose of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is suspended for some time then the expenses incurred during the suspended period are allowable. It was not in dispute that due to fire the damaged portions were removed and in that process the assessee has to pay demolition charges which is factually position and where the assessee has to change demolished portion by putting MS sheets, the assessee has, therefore, carried out repairs which was necessary for the restart of the business activity of the assessee. In this way no asset has been generated by the assessee. The CIT(A) was also of the view that the repair was made to the building etc. which was necessary for the interest of the business. As such the expenditure were revenue in nature and the CIT(A) accordingly deleted the additions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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