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TMI Blog2015 (6) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... d impugned sum of ₹ 3 lac at the time of tenancy rights way back in the year 1993.Therefore, the same cannot be treated to be an instance of concealment and inaccurate particulars of income u/s.271(1)(c) of the Act. The impugned penalty is deleted accordingly. - Decided against revenue Claim of expenditure incurred on hospital building repairs - revenue v/s capital - Held that:- Quantum and extent of repair in absence of the abovesaid factors would not convert the impugned revenue expenditure to that of capital in nature. Thus, the assessee s claim is liable to be entertained u/s.30 of the Act under the head current repairs in the nature of revenue expenditure. Assessing Officer s hypothetical assumption that section 40A(3) disallowance of ₹ 58,003/- would apply in this case if the assessee s claim is accepted as revenue expenditure. We find that the statutory expression in the said provision reads where the assessee incurs any expenditure in respect of which payment is made in a sum exceeding twenty thousand rupees . This is not the Revenue s case that the impugned payments have been made in a sum . It is not clear as to whether these payments are made on separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justified the survey statement to have been made under mistaken impression. The assessee also submitted that there was no evidence on record forthcoming supporting the survey statement. The Assessing Officer in assessment order dated 30.12.2005 quoted lack of evidence supporting the assessee s plea of having made the impugned payment of ₹ 3 lac in the year 1993. He mainly relied on survey statement and added this amount as unexplained credits u/s.68 of the Act. 4. The CIT(A) has upheld the Assessing Officer s findings as under: 2. I have carefully considered the submissions. Appellant's contention that the Assessing Officer did not have any evidence regarding payment of ₹ 3,00,000/- towards tenancy rights to Ranchhodrai Education Trust in the current year, other than statement U/S.133A dated 27.02.2003 is correct. However, it is equally correct that the appellant does not have any evidence in support of his contention that the same was paid in 1993. Merely because the premises were taken on rent since 1993, does not prove payment in 1993. Appellant has not disputed and has rather admitted that payment of ₹ 3,00,000/- was made to Ranchhodrai Education ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es accordingly and reject the first substantive ground raised in this appeal. 6. The assessee s second ground challenges lower authorities action in treating his claim of expenditure incurred on hospital building repairs of ₹ 5,76,737/- as capital in nature. The assessee has taken his hospital building on rent. He stated that its lessor/landlord was not maintaining it properly. He would accordingly spend the impugned sum and claimed it to be a revenue expenditure in the nature of building repair and renovation. The assessment order reads that a sum of ₹ 5 lac was incurred on purchase of hardware material, tiling, misc. repair and masonary work. The remaining balance of ₹ 76,737/- related to labour charges and hospital repair. The same totaled to ₹ 5,76.737/- The Assessing Officer observed that the quantum and extent of the expenditure proved the repair work s nature as an enduring and extensive work. He further stated that the same was overdue and accumulating one not in the nature of current repair within the purview of section 30 of the Act. He also took notice of the fact that the assessee had himself capitalized similar expenses in preceding assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities do not raise any issue about genuineness of the expenditure claim in question. They hold it to be capital in nature only. The assessee is a tenant of the hospital building. The hospital building work undertaken has not created any increase in the already existing capacity or a new capital asset giving enduring advantage. The findings under challenge nowhere hold so. That being the case, it is evident that the assessee/lessee has undertaken the building repair relating to functioning of hospital business without any addition or expansion of the profit making apparatus. In these circumstances, we draw support from the hon ble jurisdictional high court in Indian Ginning and Pressing Co. Ltd. Vs. CIT (2001) 252 ITR 77 (Guj.) and accept the assessee s arguments. We deem it fit to observe that quantum and extent of repair in absence of the abovesaid factors would not convert the impugned revenue expenditure to that of capital in nature. Thus, the assessee s claim is liable to be entertained u/s.30 of the Act under the head current repairs in the nature of revenue expenditure. Our this finding also takes care of the CIT(A) order invoking section 32 of the Act. So far as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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