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TMI Blog2019 (3) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... also. Respectfully following the order of the Co-ordinate Bench, we allow this ground of appeal for statistical purpose and restore the issue to the file of the AO who will follow directions given by the ITAT in the Asstt.Year 2011-12. - ITA No.2035/Ahd/2017 - - - Dated:- 26-3-2019 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member For the Assessee : Shri V.R. Chokshi, AR For the Revenue : Shri S.K. Dev, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of the ld.CIT(A)-8, Ahmedabad dated 4.7.2017 passed for the Asstt.Year 2012-13. 2. The assessee has taken following grounds of appeal: 1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) has erred in conforming deduction u/s 35D for ₹ 41,84,012/- being 1/5th of ₹ 2,09,20,060/- stating that no such ground has been taken in subsequent years by the appellant. The Assessing Officer may be directed to delete the same. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has erred in upholding addition of ₹ 7,32,288/- out o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this addition is being raised qua disallowance made by the AO and added back in the total income while determining the income under regular provisions, then we do not find any error in the order of the ld.CIT(A), because calculation has been made by the assessee itself. It has not worked out any amount required to be disallowed in the account. This addition to that extent in the regular provision is justified. 7. However, in ground no.2.1 the assessee has pleaded that this amount cannot be added back in the book profit for the purpose of section 115JB. The ld.counsel for the assessee for buttressing this point relied upon the decision of Special Bench in the case of ACIT Vs. Vireet Investments P.Ltd., 165 ITD 27 (SB) wherein it is held that no increase or decrease can be effected in the book profit calculated under section 115JB on account of certain disallowance made under section 14A. 8. Considering the above facts, we are of the view that Special Bench of the ITAT in the case of Vireet Investment P.Ltd. (supra) has formulated following question for adjudication on this issue: Whether the expenditure incurred to earn exempt income computed u/s.14A could not be added w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction of onetime premium paid on such lease land as revenue expenditure. In this connection, the assessee placed his reliance on the judgment of Hon ble Gujarat High Court in the case of DCIT Vs. Sun Pharmaceuticals industries Ltd reported in 227 CTR 206. 8.4. However, the Ld.CIT (A) rejected the claim of the assessee on account of depreciation in respect of the premium paid on such lease land on the ground that in the group company of the assessee namely torrent Power Ltd in ITA number 3133 3331/AHD/2008 vide order dated 21-1-2011 the ITAT has rejected the identical claim. 8.5. Similarly, the Ld.CIT (A) after admitting the fresh claim of the assessee, i.e. treating the premium as revenue expenses also held that the case law relied upon by the assessee, i.e. Sun Pharmaceuticals Industries Ltd is distinguishable from the facts of the present case. 9. Now the 1st question arises for our consideration whether the assessee is entitled to claim the premium paid on the leased land as revenue expenses. To our understanding, the assessee after making the payment of the premium on the leased land does not acquire any fixed assets other than the right to use such land for its c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court are is squarely applicable to the facts on hand. 11. However, the Ld.CIT (A) has held that the facts of the case of the assessee are different from the facts of the case of Sun Pharma (supra) on certain reasons which have already been elaborated in the preceding paragraph. But we disagree with the finding of the Ld.CIT (A) due to the following reasons: 1. The agreement of Sun Pharma and the assessee is with the GIDC. Thus the finding of the Ld.CIT (A) that the assessee does not have the agreement with GIDC is wrong. The copy of the agreement between the assessee and the GIDC is placed on pages 64 to 79 of the paper book. The relevant extract of the agreement is reproduced as under: LEASE DEED Of Residential Plot Nos.B-15, B-16, B-17, B-18, B-19, B20, B-21, B-22, B-23, B-24, B-25, B-26, B-27 and B-28 Atali Housing (Dahej) Industrial Estate Name of Party M/s.Torrent Energy Limited LEASE DEED THIS IDENTURE LEASE OF made at Agra on 13th day of April the year Two Thousand Eleven between the Gujarat Industrial Development Corporation, Corporation constituted under the Gujarat Industrial Development Act, 1962 and having its Head O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Madras Auto service (P) ltd. reported in 233 ITR 468 wherein it was held as under: In order to decide whether this expenditure is revenue expenditure or capital expenditure, one has to look at the expenditure from a commercial point of view. What advantage did the assessee get by constructing a building which belonged to somebody else and spending money for such construction. The assessee got a long lease of a newly constructed building suitable to its own business at a very concessional rent. The expenditure, therefore, was made in order to secure a long lease of new and more suitable business premises at a lower rent. In other words, the assessee made substantial savings in monthly rent for a period of 39 years by expending these amounts. The saving in expenditure was a saving in revenue expenditure in the form of rent. Whatever substitutes for revenue expenditure should normally be considered as revenue expenditure. Moreover, the assessee did not get any capital asset by spending the said amounts. The assessee, therefore, could not have claimed any depreciation. Looking to the nature of the advantage which the assessee obtained in a commercial sense, the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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