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TMI Blog2018 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income for the A.Y 2010-11 on 14.10.2010 admitting a total income of Rs. 8,06,95,210. During the assessment proceedings u/s 143(3) of the Act, the AO observed from the statement of computation of income that the assessee has claimed a sum of Rs. 87,50,963 as revenue expenditure with the narration 'other deductions'. On verification of the claim, the AO noticed that the assessee company has made certain addition of assets to leasehold premises and claimed the entire expenditure as revenue. When asked to substantiate its claim, the assessee, vide letter dated 21.03.2013 explained that it has made some additions to the leased premises at its marketing office, projects division office and branch office in Pune and the additions are on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve appreciated that Explanation-1 to Section- 32(1)(ii) does not cover the expenditure in question. 5. The Hon'ble Commissioner of Income Tax should have seen that the expenditure is in respect of leased premises and therefore, the Hon'ble Commissioner of Income Tax (Appeals) should have directed for the deduction thereof in the Computation of Total Income". 3. After going through the assessment order, we find that the assessee had taken the following premises on lease: i) Premises at Ameerpet for a period of 5 years commencing from 1.9.2009; ii) Premises at Pune for a period of 33 months commencing from 25.4.2008 to 24.01.2012; and iii) Premises at ECIL Post, Hyderabad for a period of 25 years. 4. From the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure claimed by the assessee is capital in nature: i) ITAT Mumbai Bench in the case of Vardhman Developers Ltd vs. ITO reported in (2015) 55 Taxmann.com 370 (Mum-Trib.) ii) ITAT Vishakhapatnam Bench in the case of ACIT vs. Effftronics Systems Pvt. Ltd reported in (2011) 15 Taxmann.com 345 (Vizag). 6. Having regard to the rival contentions and the material on record, we find that the assessee has taken three properties on rent but expenditure incurred during the relevant financial year is only on two properties i.e. one at Ameerpet, which was taken on lease for 5 years and the other one at Pune which was taken on lease for a period of 33 months. Therefore, the expenditure incurred on false ceiling as well as partition, glass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression „current repairs‟. This fact has also been taken note of by the Supreme Court in the case of Saravana Spinning Mills P. Ltd. (supra). The expression „current repairs‟ is ITA No.1202-2006 10 of 12 much more restricted than the word „repairs‟ because the latter is qualified by the word „current‟. What the assessee has done in the present case has been construed to be repairs by the Tribunal as a finding of fact. It has not brought about any new asset and more importantly it was not the intention of the assessee to bring about any new capital asset. The expenses that were incurred by the assessee were towards repairing the premises taken on lease so as to make it more conducive to its bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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