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TMI Blog2019 (8) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate to remit the matter to the ITAT for decision afresh on the treatment to be accorded to the expenditure incurred by the Assessee of the aforementioned sum of ₹ 30.86 crores and whether in particular, it should be treated as a revenue expenditure or as capital expenditure . The Court makes it clear that it has not expressed any view one way or the other on the respective contentions of the Revenue or the Assessee on the issue, and, it will be open to the ITAT, after examining the entire records, including the original return filed by the Assessee to come to a fresh decision independent of its earlier decisions and any observations in the instant order. Characterization of income - income shown by the assessee as busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n holding and setting aside the findings of the Assessing Officer that income shown by the assessee as business income should be taxed as income from house property or as income from other sources? [The contention of the respondent-assessee that the Assessing Officer had not examined and objected to depreciation as building will be also decided while examining the aforesaid question No.(i)]. 3.The material facts necessary for the purposes of present appeal are that the Respondent Assessee was the owner of a hotel known as Sea Rock at Band Stand, B.J. Road, Bandra (West), Mumbai managed by ITC Limited under a Hotel Operator Agreement effective from 1st July, 1986 up to 15th May, 2005. After 11th May, 2005, the hotel was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax (Appeals) [ CIT (A) ]. During the course of the proceedings before the CIT (A), the Assessee was allowed to raise a ground that the amount paid by it to ITC Limited at the time of termination of the agreement with ITC Limited, ought to be allowed, as a revenue expenditure. In the order dated 30th December, 2009, the CIT (A) came to the following conclusions: 6.3.2. Based on the above discussions, ground No. 3 is decided as under: (a) There was existence of business during the year. (b) An income of ₹ 2,02,67,668/- on account of royalty accrued to the appellant during the year and the same has to be added towards its total income (though not added by AO.) (c) The hotel building has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new lease of life it could only be held to be an expenditure of capital in nature . 9. The ITAT then proceeded to consider the second alternative plea that the payment had led to acquisition of intangible asset. The ITAT in the impugned order came to the conclusion that the payment cannot be said to be for acquisition of any intangible asset . It appears that the ITAT, in view of its finding that the expenditure was capital in nature, did not consider it necessary to answer the first of the three submissions of the Assessee, viz., that the expenditure was revenue expenditure and should be allowed as such. 10. Even when the above questions of law were framed before this Court by the order dated 22nd August 2013, it appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erit in the contention that this aspect of the matter, viz., if the expenditure is not to be treated as capital expenditure , then it will have to be treated as revenue expenditure was perhaps not addressed in the manner it should have been treated by the ITAT. On this aspect, therefore, the Court considers it appropriate to remit the matter to the ITAT for decision afresh on the treatment to be accorded to the expenditure incurred by the Assessee of the aforementioned sum of ₹ 30.86 crores and whether in particular, it should be treated as a revenue expenditure or as capital expenditure . The Court makes it clear that it has not expressed any view one way or the other on the respective contentions of the Revenue or the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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