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TMI Blog2014 (2) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... ure, the expenditure incurred towards current repairs for renovation and the repairs of the premises in connection with the business of the assessee and the same is to be allowed as revenue expenditure – Decided against Revenue. Disallowance u/s 14A of the Act – Held that:- The AO before invoking the provisions of Rule 8D read with section 14A sub-section (2)(iii) has to give a finding that he is not satisfied with the correctness of the claim of the assessee with regard to such expenditure - the assessee has not on its own made any disallowance on account of investment made and earning of the dividend income - the AO in the assessment order has referred the provision of section 14A (2) of the Act as well as CBDT notification dated 24.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and that of the AO be restored" 2. The assessee has filed cross-objection taking following grounds : "1. The ld. CIT(A) has erred in confirming disallowance u/s 14A of the Act of Rs.5,21,173; 2. The ld. CIT(A) has also erred in disallowance of repairs and maintenance of Rs.6,23,144/-; 3. The ld. CIT(A) has also erred in not allowing full rebate u/s 88E of The Act; 4. The respondent craves leave to amend or alter any ground or add a new grounds which may be necessary" 3. Ground No.2 of the cross-objection is connected with ground of appeal taken by department. The relevant facts are that the assessee is in the business of trading of shares and securities brokerage from share trading. 4. AO observed that the assessee debited a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p shades. That the renovation was more in the nature of interior works for making the office premises more suitable for the office running. The ld.CIT(A) accepted the contention of the assessee that the expenditure aggregating to Rs.11,01,465/- is revenue in nature and the balance of Rs.6,23,144/- is to be disallowed. It is relevant to state that the ld. CIT(A) has given the nature of the description of items for which he disallowed the claim of the assessee as revenue expenditure at page 5 of the impugned order. It is also relevant to state that the assessee also filed a list giving detail at page 3 of the paper book of items which have been allowed by ld. CIT(A) and also items which have been disallowed by ld. CIT(A). For the sake of brev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not pressed for. Ld.AR submitted that the expenditure are incurred to renovate office premises by replacing the electrical fittings and door frames etc. as the building was old one. Ld. AR relied on the decision of the Hon'ble Rajasthan High Court in the case of CIT V/s S. Zoraster Co. (1982) 133 ITR 559 (Raj) and submitted that if the expenses are incurred merely to renovate the office premises, same are allowable as revenue expenditure. He submitted that no new assets has been created by incurring the said expenses. 8. We have carefully considered the submissions of ld. Representatives of the parties, orders of authorities below and the cases cited before us (supra). On perusal of the details of expenses, placed at page 3 of the pap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka forbes Rs. 8,330/- aggregating to Rs.1,27,760/- cannot be said to be an for renovation of the building. Therefore, out of the total expenditure of Rs.17,24,609/-, we hold that save and except the expenditure of Rs.1,27,760/- i.e Rs.15,96,849/- is the revenue in nature, the expenditure incurred towards current repairs for renovation and the repairs of the premises in connection with the business of the assessee and the same is to be allowed as revenue expenditure. Therefore, the ground of appeal taken by the department is rejected and whereas the Ground No.2 of the cross-objection taken by assessee in its cross- objection is allowed in part by sustaining the disallowance of Rs.1,27,760/-. 9. In respect of ground No.1 of the cross-object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order has referred the provision of section 14A (2) of the Act as well as CBDT notification dated 24.3.2008 for applying Rule 8D and to make disallowance under Rule 8D(2)(iii) of the Rules. Considering the facts of the case and the nature of business of the assessee, we hold that there is no infirmity in the order of ld. CIT(A) and accordingly the disallowance made u/s 14A of the Act of Rs.5,21,173/- is in order. Accordingly, Ground No.1 of Cross-objection is rejected. 12. In respect of Ground No.3 of the cross-objection, the ld. AR referred the order of ld. CIT(A) that ld. CIT(A) has mentioned that the AO computed rebate u/s 88E after adjusting expenses of Rs.60,06,300/- being 49% of the indirect expenses of Rs.1,22,57,755/-. He ..... X X X X Extracts X X X X X X X X Extracts X X X X
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