9911796707
TMI Blog2017 (1) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... in so far as it is against the appellant-firm, is contrary to the facts of the case and the provisions of law. 2. The Hon'ble Commissioner of Income Tax is not justified in passing an Order U/s.263 when the Assessing Officer had allowed the claim for deduction in respect of expenditure incurred on the land taken on lease. 3. The Hon'ble. Commissioner of Income Tax is not justified in holding that the Order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue. 4. The Hon'ble Commissioner of Income Tax erred in holding the amount of Rs. 24,59,729/- incurred by the appellant-firm in respect of the land taken on lease is capital expenditure and is not eligible for deduction in the Computation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of said sum under revenue expenditure is not correct and the expenditure is however eligible for depreciation in accordance with the Explanation 1 to Section 32(1) of the I.T. Act, 1961. 3. 1 In view of the above observations, the CIT was of the view that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of revenue. Accordingly, a notice u/s. 263 dated 07/01/2016 was issued to the assessee to show cause as to why the assessment should not be revised or cancelled u/s 263 of the Act. In response, the assessee-firm filed its written submissions at the time of hearing on 22/01/2016. 3.2 After considering the submissions of the assessee, the CIT set aside the order of the AO and directed the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion introduced to Section 32(1), the assessee would be eligible to claim depreciation on the asset created. 5. The Assessing Officer has failed to consider the amount incurred for construction of workshop, claimed by the assessee as revenue expenditure, for disallowance while completing the assessment and, therefore, the assessment is erroneous and prejudicial to the interests of revenue to this extent. For the reasons given in the earlier paragraphs, the Assessing Officer is directed to re-compute the income of the assessee, after disallowing the amount of Rs. 24,59,729/-, and allowing depreciation on the workshop building. The assessment is set aside with directions to re-do the assessment in accordance with the aforementioned directio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has incurred expenditure in modifying and improving the leased property and claimed it as revenue expenditure. CIT has applied Explanation "1A" of section 32, as per which, where the business of the assessee is carried on in the leased property and any expenditure is incurred on the construction of any structure by way of renovation, extension or improvement, then, section 32 will apply and accordingly, the assessee can claim depreciation on the value spent on such improvement or changes in the structure. The AR has relied on the decision of Hon'ble Madras High Court in the case of CIT Vs. M/s TVS Lean Logistics Ltd., (supra). On careful reading of the said decision, in that case, the assessee has taken only the land on lease an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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