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TMI Blog2017 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... t of work shop (refer page 21 of paper book). Hence the assessee has only modified and improved the leased property to suit the requirement of its business. Hence, the explanation “1A” to section 32 will apply to the assessee’s case and the findings of ld. CIT is proper. Accordingly, we are inclined to uphold the order of CIT passed u/s 263 of the Act. - Decided against assessee - ITA No. 794/Hyd/2016 - - - Dated:- 13-1-2017 - SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Shri B. Satyanarayana Murty For The Revenue : Shri P. Chandra Sekhar ORDER PER S. RIFAUR RAHMAN, A.M.: This appeal filed by the assessee is directed against the order of CIT, Kurnool Charge, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maruti Cars and their services. The assessment was completed by the AO u/s 143(3) determining the income of the assessee at ₹ 52,60,754/-, as against the returned income of ₹ 38,07,188/-, by making some additions. 3. Thereafter, the CIT had an occasion to examine the assessment records for AY. 2011-12 and on perusal of the records, it was observed that the assessee-firm claimed an amount of ₹ 24,59,729/- as revenue expenditure under the head Workshop Constructions. He observed that during the course of assessment proceedings, the assessee-firm has relied upon the Hon'ble Supreme Court judgement in the case of CIT Vs. Madras Auto Service (P) Ltd (233 ITR 468), which pertains to Asst. Year 1968-69 and 1969-70, to clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter Explanation 1 has been introduced with effect from 01/04/1988 to Section 32(1) where it is clarified that in a case where the business of the assessee is carried on in a leased premises and any expenditure is incurred on the construction of any structure by way of renovation, extension or improvement, then the provisions of Section 32 would apply to the assessee, as if the building was owned by the assessee. Further, with effect from A.Y. 2004-05, the provisions of Sections 30 31 have also been amended to state that no expenditure which is capital in nature can be allowed under the head of Current Repairs of building or plant and machinery. In the assessee's case, the expenditure of ₹ 24,59,729/- has been incurred on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Masood Ali Khan and MSA Motors. pages 17 to 20 4. Copy of the lease agreement Ahmed Ali Khan and M/s MSA Motors. pages 21 to 26 5. Copy of the reply dated 22/01/2016 against the show cause notice u/s 263 pages 27 to 34 6. Copy of the letter dated 19/12/2013 addressed to Additional Commissioner of Income-tax, Kurnool pages 35 36. The ld. AR relied on the decision of Hon ble Madras High Court in the case of CIT Vs. M/s TVS Lean Logistics Ltd., a copy of which is available at pages 37 to 44. 6. On the other hand ld. DR relied on the order of the CIT and placed reliance on the following cases: 1. Asst. CIT Vs. Efftronics Systems (P) Ltd., [2011] 133 ITD 460 (Vizag) 2. CIT Vs. Madura Coats, [2012] 19 taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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