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TMI Blog2013 (8) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... instead of that from ‘house’ property. In the course of arguments, the Revenue has not been able to cite any distinguishing features. Accordingly, we rely upon the said decision and decide the issue in favour of the assessee. Allowability of expenditure - Held that:- The assessee is entitled for the expenses in question. We also find that the Commissioner of Income Tax (Appeals) has already issued necessary directions to the Assessing Officer to allow ‘revenue’ expenditure and also to capitalize the expenses which are not in the nature of current repairs. In our opinion, since the Commissioner of Income Tax (Appeals) has issued appropriate directions to the Assessing Officer to verify the nature of the expenses, we affirm with the same and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongly argues that the Commissioner of Income Tax (Appeals) has erred in upsetting the findings of the Assessing Office, in holding the assessee's income from incubation project as 'business' income as well as in allowing the current repairs in question. In the light thereof, it prays for acceptance of all appeals. 3. In reply, the assessee strongly argues in support of the findings of the Commissioner of Income Tax (Appeals) in all the assessment years. To buttress the contentions on the main issue, it relies on the case law of CIT v. M/s.Elnet Technologies Ltd. (2012)TIOL 904 (Mad.) dated 09.10.2012. On the repair issue, it quotes the case law of (2013) 31 Taxman.com 3(Mad) Thiru Arooran Sugars Ltd. V. DCIT and prays for rejection of all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in refurnishing on carpets, false ceiling, kitchen equipment, landscapes, painting & finishing, road laying, roofing & hard drill, sanitary work, security control cabling, structured cabling, tiles, vertical blinds, painting, insurance, interest, loan processing fees, licence taxes, steel trends etc. The assessee had returned the receipt above said under the head 'business' income. The Assessing Officer did not agree with the said treatment of receipts offered by the assessee. In his opinion, the assessee being a sub lessee, did not raise the receipts from any business activity. Therefore, he held that the same had to be taken as income from 'house property'. Similarly, qua the refurnishing expenses, he was of the opinion that the same were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factual position already stands narrated herein above. The assessee is a company engaged in the business of IT development and construction of multi-storey infotech. The impugned receipt has been raised by the assessee after providing 'incubation' project facility to its lessee who is also a software company after furnishing the building etc in the nature of movable assets. In this backdrop, we notice that the hon'ble jurisdictional high court in the case of M/s. Elnet Technologies Ltd (supra) has squarely decided the issue in favour of the assessee wherein it has been held that in case of a company providing software infrastructural facilities on lease in lieu of rent payment, the receipt is 'business' income instead of that from 'house' p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or relaying of the damaged floors, painting and partition in respect of the leased property. Referring to the decision of the apex court in CIT v. Madras Auto Service (P) Ltd.[1998] 233 ITR 468/99 Taxman 575, this court pointed out that the expenditure incurred in respect of the maintenance of the leased premises was deductible as revenue expenditure. 4. As regards the contentions taken by the Revenue placing reliance on Explanation 1 to section 32(1)(ii) of the Income-tax Act, which was inserted with effect from April 1, 1988, this court pointed out that the explanation is an exceptional one which permits depreciation in cases where the assessee does not own a building, in respect of which the assessee incurs capital expenditure on the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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