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TMI Blog2015 (12) TMI 889X X X X Extracts X X X X X X X X Extracts X X X X ..... d abroad, no part of income had accrued or arisen in India. The assessee is not liable to deduct tax at source on the payments so made. The findings of the CIT(Appeals) on this issue are set aside - Decided in favour of assessee. Disallowance of expenditure incurred on improvement/renovation of leasehold building - CIT(A) deleted the addition - Held that:- The expenditure incurred by the assessee for demolition, painting, flooring, partition, modular and electrical works on the leasehold premises is revenue expenditure. Thus, we uphold the orders of the Commissioner of Income Tax (Appeals) on this issue and reject the grounds of appeal raised by the Revenue. See Sundaram BNP Paribas Asset Management Co. Ltd. v. ACIT [2011 (1) TMI 1242 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 dated 19.7.2013 in favour of the assessee. He places reliance on the said decision of this Tribunal for the earlier assessment year. 4. Departmental Representative relied on the order of the Assessing Officer. 5. Heard both sides. Perused orders of lower authorities and the order of the co-ordinate Bench of this Tribunal. We find that the issue in appeal is squarely covered by the decision of the co-ordinate Bench of this Tribunal in assessee's own case on identical facts and circumstances for the earlier assessment year. The co-ordinate Bench while deciding the issue in favour of the assessee and deleting disallowance made under section 40(a)(ia) held as under:- 'iii. The third ground in the appeal relates to dis-allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; (v) the transfer of all or any rights (including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... renovation of leasehold building. 8. Counsel for the assessee submits that this issue of disallowance of expenditure on repairs to leasehold premises also was considered by the co-ordinate Bench of this Tribunal in its order for the earlier assessment year i.e. 2008-09 in ITA No.1774/Mds/2012 dated 19.07.2013. Counsel for the assessee referring to page 49 of the paper book submits that assessee incurred repairs and renovation expenses in all the branches in India amounting to ₹ 17,20,406/- and ₹ 16,81,348/- for the assessment years 2009-10 and 2010-11 respectively and all these repairs were towards painting, flooring, partition work, repairs to false ceiling, storages, modular work and electrical works. Counsel placing relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars with an option to extend with the consent of both parties. An Explanation 1 to Section 32(1) clearly spells out that where the business or provision of the assessee is carried on in a building not owned by him, in respect of which the assessee holds a lease or other rights of occupancy, any capital expenditure is incurred by the assessee for the purpose of the business or profession on the construction of any structure or doing of any work in or in relation to and by way of renovation or extension or improvement to the building, then the provisions of this clause shall apply as if the said structure or work is building owned by the assessee. However, the aforesaid provisions are applicable where new asset has come into existence. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture which has been capitalized would stand reversed. Whether the expenditure incurred on renovation of a building is capital or revenue, is a question of fact. The same has to be decided on the facts of each case. We find that the facts of the case of the assessee are similar to the one adjudicated by the Tribunal mentioned above. The civil work relates to the interior decoration and creation of the office atmosphere. Respectfully following the decision of the co-ordinate bench of the Tribunal, this ground of appeal of the assessee is allowed and the expenditure incurred by the assessee in modifying the interiors of a building into office are held to be revenue in nature. 11. The co-ordinate Bench considered a similar issue where th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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