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TMI Blog2016 (6) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... blinds, sun control films, fire alarm systems etc. The expenditures which have been incurred on the premises does not belong to the assessee, albeit has been taken for a temporary period for conducting its business, that is, to work efficiently in the premises looking to the needs and requirements of modern business premises. The Department has referred to Explanation 1 to section 32, which only refers to any capital expenditure incurred. It does not speak about the revenue expenditure. Thus, reference of Explanation 1 to section 32 in the grounds of appeal may not be relevant. The section 30(a)(i) on the other hand provides that, if repairs have been carried out in the premises occupies as a tenant then it has to be allowed as deduction under section 30 as ‘repairs’ that is, as cost of repairs to the premises. Thus the expenses should be looked upon as having been made for the purpose of conducting the business more profitably. Thus, if the expenditure has been incurred for carrying on business more efficiently on day-to-day basis then it has to be reckoned as revenue expenditure. - Decided in favour of assessee - ITA No. : 3045/Mum/2012, ITA No. : 3046/Mum/2012, ITA No. : 4088/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made even if there is no exempt income during the year. Accordingly, he worked out the disallowance at ₹ 2,17,167/-. 3. The Ld. CIT(A) too has confirmed the said addition after discussing the decision of Hon ble High Court decision in the case of Maxopp Investment Ltd vs CIT 347 ITR 272 (Del). 4. Before us, the Ld. Counsel submitted that now in wake of latest High Court decision in the case of Cheminvest Ltd. vs. CIT, reported in 378 ITR 33, no disallowance under section 14A can be made if there is no exempt income during the year. 5. On the other hand, Ld. DR relied upon the decision of ITAT Mumbai Bench in the case of Double dot Ltd vs DCIT, reported in [2014] 65 SOT 324 also referred to CBDT Circular No.5 of 2014 dated 11.04.2013 and contended that, even if investment in shares are capable of earning exempt income then also disallowance under section 14A can be made in this year. 6. We have considered the rival submissions and also perused the relevant finding given in the impugned order. It is an undisputed fact that, the assessee has not earned any exempt income during the year on the investment made in the subsidiary company, stated for the business purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will take-up cross appeal by the revenue in ITA no. 4088/Mum/2014, vide which following grounds have been raised:- 11. Thus, the only issue involved in revenue s appeal is disallowance of expenditure incurred on repairs and maintenance on household premises by treating the same to be capital expenditure. 12. Brief facts are that, the assessee had taken two premises on leave and license basis for the purposes of its business, one at Tirpur for the period of 6 years and other premises at Rabale for the period of 5 years. In order make the said premise suitable for its business requirement, it had incurred total expenditure of ₹ 2,07,20,189/- for carrying out repairs and renovation of the said premise. The said expenses were capitalized in the audited accounts. However, at the time of filing of return of income, the expenses to the extent of ₹ 1,98,68,798/- was claimed as revenue expenditure. It was contended that nature of expenses was neither for any enduring benefit nor any capital asset has come into existence. The expenditure incurred and its nature thereof has been stated in the following manner:- Nature of Expenses Advanta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch and development work. It is also submitted that the leave license agreement entered into by the appellant specifically does not conferred any tenancy rights or other benefits or interest to the appellant. The appellant had to vacate the premises on expiring of the agreement in September, 2013. The appellant in order to make the place fit for its use carried out certain works which are in the nature of furniture and fixtures namely electrical fitting, aluminum partition, fall selling, plumbing, fire alert systems, tables and others furniture articles to make the place workable for it. The Ld. AO treated this expenditure as capital expenditure. The Hon'ble Bombay High Court in the case of CIT v/s. TVS Len Logistics Ltd reported in 293 ITR 432 had categorically stated that renovation or the improvement must be to the building In the instant case, repairs renovation is in respect of the premises occupied by the appellant and not to the entire building and therefore the expenditure clearly falls in the realm of revenue expenditure. Further, similar view was expressed by the Hon'ble Bombay High Court in the case of CIT v/s. Hede Consultancy P. Ltd reported in 258 ITR 38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is obvious that the word repairs is much wider than the expression current repairs . This fact has also been taken note of by the Supreme Court in the case of Saravana Spinning Mills P. Ltd. (supra). The expression current repairs is much more restricted than the word repairs because the latter is qualified by the word current . What the assessee has done in the present case has been construed to be repairs by the Tribunal as a finding of fact. It has not brought about any new asset and more importantly it was not the intention of the assessee to bring about any new capital asset. The expenses that were incurred by the assessee were towards repairing the premises taken on lease so as to make it more conducive to its business activity. Such expenses would clearly fall within the expression of repairs to the premises as appearing in Section 30(a)(i). The legislature has made a distinction between expenses incurred by a tenant for repairs of the premises and expenses incurred by a person who is not a tenant towards current repairs to the premises. This distinction has to be given meaning. Perhaps the logic behind the distinction was that a tenant would, by the very na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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