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TMI Blog2016 (7) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of facts found was in any way arbitrary or perverse. Thus we find no merit in the above submission. In the view taken by us that the expenditure of 75% of ₹ 31.32 lacs i.e. ₹ 23.49 lakhs is on capital account, the submission to claim deduction on account of Section 30 of the Act made by the Appellant need not be examined. In the above view, the concurrent finding of fact by the Authorities under the Act that the expenditure incurred claiming to be the repairs and maintenance was in fact on account of renovation of the premises, leading to enduring benefit to the appellant assessee in as much as it enabled the appellant to accommodate larger number of employees and also facilitate its trading operations. This ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head Repairs and Maintenance while determining its income. Out of the aforesaid amount of ₹ 47.63 lakhs as expenditure, an amount of ₹ 31.32 lakhs related to the said premises. The Assessing Officer on examination of the nature of expenses found that the same were substantially capital in nature i.e. renovating the said premises by doing civil work. However, some part of its expenditure were found to be revenue in nature, example plastering. Therefore, the Assessing officer attributed 75% of the expenditure claimed as capital and 25% as revenue i.e. ₹ 23.49 lakhs (capital expenditure) and ₹ 7.83 lakhs (revenue expenditure) aggregating to ₹ 31.32 lakhs. The Assessing Officer allowed 10% depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rieved, the appellant is in appeal and the appeal has been admitted on the above question of law. Mr. Jhaveri, learned Counsel appearing for the appellant in support submits as under : (a) The expenditure of ₹ 31.32 lakhs claimed on account of repairs and maintenance of the said premises is allowable as revenue expenditure. This is no longer res integra in view of the decisions of this Court in Commissioner of Income Tax Vs. Talathi and Panthaky Associated P. Ltd. 343 ITR 309 and Commissioner of Income Tax Vs. Hede Consultancy Pvt. Ltd. and Anr. 250 ITR 350. In the above cases, it is submitted that on an identical factual situation the expenditure on renovation of tenanted premises has been allowed as revenue expenditure under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of the owner of the said premises, therefore in the hands of the tenant it can only be revenue expenditure is more then met by the impugned order of the Tribunal. This in view of the fact that the impugned order places reliance upon ExplanationI to Section 32 of the Act, which allows depreciation to a tenant in case of any capital expenditure incurred for renovation / improvement to the building in the hands of the tenant by deeming the tenant to be the owner of the premises. In this case the benefit of depreciation has been given to the appellant on the capital expenditure incurred for renovation. 6. Mr. Jhaveri, learned Counsel for the appellantassessee then submits that on an identical fact situation expenditure incurred by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecured by the appellant in the revenue field. There was no decrease in the rent nor was there any embargo on future increase in the rent in consideration of the expenditure for renovation. Therefore, the above decision would not apply to the facts of the present case. 7. Similarly, the decision of this Court in Hede consultancy Pvt. Ltd. (supra) upon which also reliance is placed upon also dealt with the situation where the amount expended for interior decoration and renovating of a godown premises so as to be converted into an office premises was allowed as a revenue expenditure, will not apply to the present facts. This is because in that case the tenant got the benefit of lower rent in view of the expenditure incurred on renovation. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e examined. This for the reason that the Explanation to Section 30 of the Act itself provides that the amount paid on the cost of repairs would not include any expenditure which is in the nature of capital expenditure. Although this Explanation to Section 30 of the Act was introduced in 2004 w.e.f. 1st April, 2004, the Explanation itself clarifies that it has been introduced for removal of doubts. Therefore, it would be applicable even for the period prior 1st April, 2004 including the subject Assessment year. It is for the above reason the learned Counsel for the appellant very fairly did not even attempt to suggest that deduction under Section 30 of the Act would be available even in respect of capital expenditure. 10. In the above vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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