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TMI Blog2017 (3) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ration:- 1."Whether, on the facts and in the circumstances of the case, the Tribunal, was correct in law, in deleting the addition of Rs. 2.37 crores incurred for repairs and maintenance without appreciating that professional fees of Rs. 23.99 lakhs paid for temporary plan created for construction of two new floors constituted "Capital Expenditure" as new asset was created and / or new extension to existing assets was made and hence, not allowable as revenue expenses u/s. 37(1) of Income Tax Act, 1961" 3. The question as framed consists of two issues, as under : (i) The first issue is of legal and professional fees paid of Rs. 23.99 lakhs for temporary plan for access and exit during the construction of two floors, to enable the runni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A)). However, the appeal filed by the respondent-assessse was dismissed. 7. Being aggrieved, the respondent-assessee filed an appeal to the Tribunal. So far as the first issue viz. Legal and professional fees is concerned the impugned order holds that a sum of Rs. 22.44 lakhs was paid to professional interior designer, to provide an alternative access and exit to the Hotel during the period of construction of two additional floors. This expenditure was incurred for continuing to run its business and was allowed under Section 37(1) of the Act. So far as the balance expenditure on the above account, is concerned the Tribunal held that those expenses have been incurred in the regular course of Hotel business and has to be allowed. So far a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, we find that during the period of construction of two additional floors, a temporary operational plan had to be prepared providing for alternative access to and exit from the Hotel. This without compromising on the high standard expected by customers in respect of ambiance and comforts in a Five Star Hotel. The respondent-assessee had engaged a professional interior designer to plan temporary access and exit from the Five Star Hotel and for which an amount of Rs. 22.44 lakhs was paid. This expenditure which was incurred by the respondent was necessary for carrying on business as it resulted in increased turnover in the subject Assessment year as compared to the earlier years. Therefore, this expenditure is allowable as deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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