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TMI Blog2019 (2) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... f a dispute - assessee urges that the ruling in Triveni Engineering [2010 (9) TMI 26 - DELHI HIGH COURT] is inapplicable because of peculiar facts of that case as relied upon to deny claim of deduction HELD THAT:- The distinctions sought to be made by the assessee/appellant that Triveni Engineering (supra), was decided in peculiar circumstances of the case, since the amalgamated company s books were assessed as it were in the hands of the transferee company [Triveni Engineering], in the opinion of this Court, is an insubstantial aspect which is not sufficient to distinguish the ruling. The reasoning in Triveni Engineering (supra) is not limited to such a fact situation. Furthermore, this Court notices that the decision in Madras Auto Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, as receivables . On account of unforeseen circumstances i.e. sealing of the premises on account of non-conforming user by directions of the Supreme Court through the Monitoring Committee, the premises could not be used. The petitioner, therefore, sought to vacate it; this resulted in the dispute between the lessor and the appellant/lessee. To end the dispute, the lessee i.e. assessee agreed not to claim the security deposit of ₹ 5.8 crores. As a result, it sought to claim the amount as deduction. The AO disallowed this holding that such disallowance was impermissible; the CIT(A) and the ITAT relying upon the Commissioner of Income Tax vs. Triveni Engg. Industries Ltd. 343 ITR 245 (Del.), upheld the disallowance. 3. Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Department that the payment of security deposit to landlords was for obtaining use of premises for the purposes of business against the payment of rent. The contention of the assessee, in this backdrop, is that this payment was clearly in the revenue field, viz., for facilitating carrying on of business more profitably and efficiently while leaving the fixed capital untouched. Learned counsel for the Revenue, however, argues that the security deposits were given for obtaining the premises on rent and thus, the assessee had obtained a right to use the property, i.e., tenancy right, which is a capital asset. 16. In order to appreciate the controversy, we may first state the true nature of this deposit. When the premises were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of a leased property was treated as revenue expenditure by the Supreme Court, as the assessee was getting business advantage and was acquiring the business asset in the context of specific Clause in the lease deed. Therefore, the property was not treated as that of the lessor. Further, the Supreme Court found that by incurring the expenditure of this nature, the assesse had taken the advantage in the form of reduced rent for a much longer period. This judgment is, thus, not applicable in the present context. 5. The distinctions sought to be made by the assessee/appellant that Triveni Engineering (supra), was decided in peculiar circumstances of the case, since the amalgamated company s books were assessed as it were in the hands o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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