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TMI Blog2017 (2) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred upon lease hold improvements - Held that:- The expenditure incurred on lease hold premises has been treated by the above said authorities as revenue expenditure, therefore, in view of the said circumstances we are of the view that the finding of the CIT(A) on this issue is wrong against law and facts, therefore is not liable to be sustainable in the eyes of law hence we set aside the finding of the CIT(A) on this issue and direct the Assessing Officer to consider the expenditure as revenue in nature. Accordingly, this issue is decided in favour of the assessee against the revenue. - I.T.A. No.3595/Mum/2013 & 6786/Mum/2012 - - - Dated:- 25-11-2016 - SHRI R.C.SHARMA, AM AND SHRI AMARJIT SINGH, JM For The Assessee : Shri Dinesh Vyas Srihari Iyer For The Assessee : Capt. Pradeep Arya ORDER PER AMARJIT SINGH, JM: The assessee has filed the above mentioned two appeals against the order dated 15.02.2013 and 09.08.2012 passed by the Commissioner of Income Tax (Appeals) 13, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the assessment year 2008-09 and 2009-10 respectively. Since common question of law and facts Assessee by: Shri Dinesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the business of providing Engineering Consultancy service. During the year, income from services has been shown to the tune of ₹ 192.99 crores. The major expenditure was on account of employees which amount to ₹ 89.70 crores. In the Profit Loss A/c. the profit before tax has been shown at ₹ 45.17 crores. During the relevant assessment year the assessee earned the dividend/exempt income to the tune of ₹ 50,000 and ₹ 1,11,23,750/- on account of Long Term Capital Gain on Mutual Fund and ₹ 31,55,355/- on account of other income from mutual funds. The assessee did not disallow any expenditure relating to these exempt income, therefore, the Assessing Officer applied the provision u/s.14A sub clause (iii) of rule 8D of the Act and the expenditure was assessed to the tune of ₹ 48,90,200/-. The assessee also claimed the expenditure on account of lease hold improvements to the tune of ₹ 85,64,892/- but the same was disallowed by treating the same as capital in nature. The assessee also claimed the depreciation on the software for the earlier years amounting to ₹ 1,43,45,844/- but the same was also disallowed on the basis of this fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue for the statistical purpose. ISSUE NO.2:- 5. Issue no.2 is in connection with the confirmation of the expenditure incurred upon lease hold improvements. The assessee took some premises for the purpose of his business. The premises were taken for the lease period of three years. The assessee did some improvement such as cabling work for computers / LAN, tiles, flooring, partition, fixing floor mats and other interior work etc., electrical fixtures and other electrical works, switches and distribution boards. The Assessing Officer was of the view that the same was of the capital in nature, therefore, the same is not liable to be allowed and the same view of Assessing Officer was confirmed by the CIT(A) by virtue of order in question. The learned representative of the assessee has argued that the expenditure on lease hold is revenue in nature and also relied upon the law settled in CIT Vs. Talathi Panthaki Associates (P.) Ltd. (343 ITR 309) (Bom.) and CIT Vs. HEDE Consultancy (P.) Ltd. (258 ITR 380) (Bom.) and CIT Vs. Hi Line Pens (P.) Ltd. (175 Taxman 132) (Delhi) and Urban Infrastructure Venture Capital Ltd. Vs. DCIT (48 taxmann.com 156) (ITAT Mumbai) and Peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her additional depreciation amounting to ₹ 1,25,87,517/- due to difference in depreciation rate from 25% to 60% for the A.Y.2004-05 and 2005-06. It was contended that assessee had claimed depreciation, @ 25% instead of 60%. The FAA rejected the claim made by the assessee and held that it was not allowable during the year under consideration as it pertained to A.Y.2004-05 and 2005- 06. 12.1 Before us, AR stated that letter dated 02.12.2009 was submitted before the AO, that the AO did not rejected the claim of the assessee on merits, that he had rejected the claim only on the ground that the assessee did not make the claim in its return of income or revised return of income, that the FAA had not examined the facts of the case and had summarily dismissed the ground that claim can made before the AO otherwise then by filing revised return. In his support he referred cases of Balmukund Acharya (310 ITR 310), Ramco International (332 ITR 306), Chicago Pnematic India Ltd. (15 SOT 252), Hero Honda Finlease Ltd. (115 TTJ 752) and Raj Rani Gulati (345 ITR 350). DR supported the order of the FAA. 12.2 We have heard the rival submissions and perused the material before us. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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