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TMI Blog2014 (12) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer, that the Director had gone to Thailand on his personal tour, without appreciating, that the Director had gone to China by Thai Airways, as appeared in the Travelling bill - since only a part of the claim made by the assessee has been allowed, it is obvious that the AO himself did not dispute the nature of the expenditure as a business expenditure –the order of the CIT(A) is upheld – Decided against revenue. Classification of repairs and maintenance – Capital in nature or not – Held that:- The premises whereat the repairs and maintenance were carried out, was a rented premises - Tiles, adhesive and other raw-material were purchased for improvement and beautification of the premises - this expense did not amount to capital expenditure, just because the bills were raised for renovation - The repairs were found to have been carried out as a business necessity of the assessee - whenever the assessee incurs expenditure for repair and maintenance of a building taken on lease for carrying on its business activity, it has to be allowed u/s 30(a)(i) - CIT(A) correctly noted that it was only for the year under consideration, that a sum had been disallowed out of the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n export in the business activity of the assessee; and that there appeared to be no nexus of these expenses with the business carried on by the assessee. He further observed that most of these expenses were incurred in cash and as such, were not open to full verification; that the essential condition for allowability of an expense u/s 37(1) of the Act is that the expense should not be of a personal nature; and that, however, in the instant case, the assessee had debited its personal foreign tour bills in this account. Accordingly, the Assessing Officer made an ad-hoc addition of ₹ 2,00,000/- to the total income of the assessee. 4. While deleting the addition, the learned CIT(A) held as follows (para 4.2, page 22): The second issue is relating to addition of ₹ 2,00,000/- out of travelling expenses of ₹ 8,54,903/-. The Assessing Officer has stated that directors have taken foreign tour for pleasure trips. The appellant contended before me that that the directors went to Beijing through Thailand for a conference. The expenditure was for the conference organized by its principal TATA Motors and it was not a pleasure trip as envisaged by the A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany for their stay at Beijing from 13th June, 2008 to 16th June, 2008, in respect of their boarding, lodging, and local travelling, etc. The purpose of the conference was with regard to the accomplishments and challenges, medium and heavy trucks, light buses, to make their customers aware about their latest techniques and technologies, likely to be presented in the market, and to provide knowledge about the service of their vehicles, spare parts, etc. Therefore, it was obligatory on the Director to go and attend the said conference, and as such, the tour was having no personal element. In support, the copy of bill dated 06.06.2008 was also filed along with the copy of cash memo dated 11.06.2008, towards the payment of to and fro expenses from Delhi to China and for having the currency also, from which, it was wrongly inferred by the Assessing Officer, that the Director had gone to Thailand on his personal tour, without appreciating, that the Director had gone to China by Thai Airways, as appeared in the Travelling bill. 10. It was also considered by the learned CIT(A), that the Assessing Officer had failed to appreciate and did not consider the following facts: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leted the addition by holding as follows: The A.O. has disallowed a sum of ₹ 14,86,874/- on the ground that expenditure is capital in nature because it was a renovation and beautification of present premises. The appellant on the other hand stated that it is a revenue expenditure of normal routine repair and maintenance. After considering the rival submissions, I find that this is a rented premises and the appellant has carried out repair and maintenance and purchased tiles, adhesive and other raw-material for improvements and beautification. Merely, because the bills are raised for renovation that does not make the expenditure capital. This is a rented premises on which the appellant has carried out certain repairs as per the necessity of business. This expenditure is allowable under section 30(a)(i). Accordingly, the addition is not sustained and deleted. 14. Before us, the learned DR has contended that the learned CIT(A) has wrongly admitted the additional evidence filed by the assessee during the appellate proceedings, without affording opportunity to the Assessing Officer under Rule 46A of the Income Tax Rules, 1962, when the assessee had not filed any docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been held/opined by the Assessing Officer. This apart, the Assessing Officer had never stated that the said expenditure, to the extent of ₹ 14,36,874/-, claimed by the assessee company in the Profit Loss A/c for the purpose of repairs/maintenance/renovation, had either not been incurred, or was not having any nexus with the activities of the assessee company. The necessary evidence with regard to the ownership of the showrooms/offices had already been filed and placed on record. From the assessment years 2005-06 to 2009-10, the assessee company was constantly incurring expenditure for the maintenance/repairs/update of their leased showrooms/premises hired by them, as per the requirement of the company, who had appointed them as one of their dealers for the sale/purchase of their commercial and other vehicles and had been claiming the same as revenue expenditure through the Profit Loss A/c and the same was also constantly being accepted year after year under the head Revenue Expenditure while finalizing the assessment proceedings of the relevant year. The learned CIT(A) correctly noted that it was only for the year under consideration, that a sum of ₹ 14,36,874/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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