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TMI Blog2013 (8) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... licensee - Said expenditure cannot be said to be a revenue expenditure but it is a capital expenditure giving enduring benefits to the assessee in the form of regular receipt of monthly rent and interest free refundable security deposits - CIT(A) has rightly held that the said expenditure incurred by the assessee in relation to the premises under consideration for complete renovation to suit the requirements of licencee is a capital expenditure and the assessee is entitled to depreciation - Explanation to section 32(1) of the Act also stipulates that all the expenditures incurred by the assessee in relation to lease premises for renovation or extension or improvement is entitled to depreciation as is shown by the assessee - Decided against Assessee. Disallowance of expenditure incurred on repairs to Air conditioner - Held that:- expenditure has been incurred by the assessee towards cost of new compressor and to replace old damaged one, therefore, no new asset has come into existence. The said expenditure is revenue in nature as expenditure has been incurred to replace the damaged compressors of existing Air- conditioners - Decided in favour of assessee. - I.T.A. No. 7986/Mum/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Painting work 63,548 5. M.B. Interior Carpentry work 1,65,615 6. Kumkum Designer Tiles Tiles 4,512 7. Padma Prabhu Granite Marble Tiles 3,23,559 8. Technico Engg. Corporation Fabrication Work 1,06,300 9. Deepak Luminaires Room Fitting 22,200 10. Shri Bhagwan Chowdhary Painting Work 2,11,627 11. V.K. Brothers Railing 1,01,046 12. Mamta Paints Paints 1,13,261 13. National Electric Hardware Paints 1,53,778 14. Rustom Siddiqui Gypsum Ceiling 2,46,207 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abour charges 24,600 10. Water drilling pump services Spares for borewell 37,515 11. Alfia Interiors Carpentry work 36,635 12. Shree NM Electricals Ltd. Armed Copper cable 20,002 13. Shiv Enterprises Cement 36,375 14. Paresh Traders Cement 57,200 15. M.K. Sales Agency Sand Metal 38,130 16. Shree Sai Transport Sand Metal 18,750 17. KMC Transport Bricks Sand 46,460 18. AAK Traders Metal 18,000 19. Rahul Trading Bricks 18,000 20. Chisty Enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence it gives enduring benefits in the form of rent and considered the said expenditure as capital expenditure. The AO treated the said amount of ₹ 59,65,835/- as capital expenditure and stated that the assessee is entitled for depreciation. The AO has further stated that the most of the expenditures have been incurred during the second half of the year. Therefore, depreciation at the rate of 5% is allowable which works out to ₹ 2,98,292/- and allowed the same. Thus, the AO disallowed the remaining amount of ₹ 56,67,543/- and added back to the total income of the assessee. Being aggrieved, the assessee filed appeal before the First Appellate Authority. 6. The ld.CIT(A) has confirmed the action of the AO vide paragraph 4.3 of the impugned order which is reproduced below: 4.3. I have carefully considered the facts of the case, the submissions of the appellant, assessment order. The appellant has admittedly incurred huge expenditure on civil work, painting, fitting, tiling, plumbing, aluminium windows etc. in respect of leased premises and these are in the nature of complete renovation of the premises. Further, the appellant has declared the rental income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 468 (SC) 2. CIT Vs. Hede Consultancy Pvt. Ltd. (2002) 258 ITR 380 (Bom) 3. CIT V/s Talathi And Panthaky Associates Pvt. Ltd., (2012) 343 ITR 309 (Bom.) 4. Nila Products Ltd. vs. CIT (1984) 148 ITR 99 (Bom) 5. MDCIT V/s Sandoz (P.) Ltd. (2012) 137 ITD 326(Mum.) 6. Cymroza Art Gallery V/s ACIT (2013) 21 ITR (Trib)262 (Mum) 7. DCIT V/s Bijesh Thakkar (2012) 49 SOT 502 (Mum.) 8. Instalment Supply P.Ltd V/s CIT (1984) 149 ITR 52 (Del) 9. CIT V/s Dr.A.M.Singhvi (2008)302 ITR 26 (Raj) 10. CIT V/s Ayesha Hospitals P.Ltd (2007) 292 ITR 266 (Mad) 11. ACIT V/s M.M.Publications Ltd. (2011)43 SOT 59 (Cochin) 8. On the other hand, the ld. DR supported the orders of the authorities below and assessee has itself stated before the ld. CIT(A) that the assessee was under business compulsion to breakdown the laboratory facilities which was carried out at the premises under consideration and thereafter carried out the complete renovation so as to suit the requirements of the liecensee. The ld.DR submitted that the nature of the expenditure, details contained at pages 33 and 34 of the paper book, and also stated by the AO in the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts sister concern, a partnership firm to take the said premises on rent on monthly rent of ₹ 3000/- and thereafter spent the said amount of ₹ 59,65,000/- in the Financial Year relevant to the year under consideration and let out the said premises at monthly rent of ₹ 15,00,000/- appears to be a colourable device. Since the said issue is not before us and the AO has already assessed income so received by the assessee under the head business income and we have confined ourselves keeping in view the above facts as to whether the said expenditure incurred by the assessee to renovate the said premises is to be allowed as capital expenditure or as a revenue expenditure. We have already stated hereinabove the details of the expenditures incurred by the assessee. Considering the above facts, we are of the considered view that the said expenditure has been incurred by the assessee for complete renovation of the building to suit the requirement of licensee viz M/s S.Kumar Nationwide Ltd, as the assessee itself contended before the ld. CIT(A) (paragraph 4.2 of impugned order), we are of the considered view that the said expenditure cannot be said to be a revenue expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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