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TMI Blog2020 (5) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... purely in nature of repairs. In fact such kind of repairs and renovation expenses on leased premises has been held as revenue expenditure by the various courts as relied upon by the ld. counsel. Accordingly, hold that expenditure incurred by the assessee is allowable and the additions made by the AO are deleted. Such an addition or disallowance cannot be made u/s 40(a)(ia), because the major expenses relates to purchase of material and labour payments are for petty amounts, on which TDS liability is not attracted. - Decided in favour of assessee. - I.T.A. No.3204/DEL/2015 - - - Dated:- 5-3-2020 - Shri Amit Shukla, Judicial Member For the Appellant : Shri Rohit Jain, Adv. Shri Aditya Vohra, Adv. For the Respondent : Shri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e natural justice demands that the Assessing Officer should be given an opportunity to examine the issue afresh in the light of the lease deed. We, therefore, set aside the orders of the authorities below on this point and restore the matter back to the file of the Assessing Officer. We direct the assessee to produce the lease deed and any other explanation/evidences which he wants to produce before the Assessing Officer. Thereafter, the Assessing Officer is directed to readjudicate the issue afresh in accordance with law. 3. The facts in brief are that the assessee is engaged in the business of designing software and offering consultancy services to various multinational companies/agencies. For the purpose of its business, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital in nature. The genuineness of the expenditure at no stage was in doubt. However, in first appeal, the Ld. CIT (A) for the first time even doubted the genuineness of the expenses incurred on the basis of certain inquiries conducted behind the back of the assessee in the remand proceedings and on the basis of the remand report submitted by the Assessing Officer the Ld. CIT (A) has confirmed the disallowance of the expenses holding it to be non genuine. Alternatively, the Ld. CIT (A) has stated the repair and renovation expenses are not allowable since TDS was not deducted. 5. I have heard both the parties at length and also perused the relevant material on record. The contention of the ld. counsel before us is that, the only issue ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out any renovation work and behind the back of the assessee. Such information or material cannot be relied upon and such it is inadmissible in law. The assessee during the course of original assessment proceedings itself has submitted that all the details of repair and renovation expenses for purchase of materials and getting installed by petty contractors. The said expenditure was incurred way back in the financial year 2006-07 and now exparte inquiries conducted after a gap of seven years cannot be accepted. Any statement of a contractor, denying having done any work after a gap of seven year cannot be relied upon especially when copies of invoices raised by the same contractor were filed. He further submitted that repair and renov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he direction of the Tribunal, which was limited to, whether the repair and renovation expenses incurred on a lease property is revenue expenditure or is capital in nature. Nowhere the genuineness of the expenses incurred were doubted nor the bills and vouchers for the purchase of material and for the renovation work filed before the authorities below was ever disputed or found to be non genuine. The direction of the Tribunal was very categorical, firstly , to admit the lease deed; and secondly , to decide whether the expenditure incurred is revenue in nature or not. The ld. Assessing Officer in the assessment order has again treated the expenditure as capital in nature. The entire context of the addition got changed when in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repair and maintenance of lease property cannot be held to be giving any enduring benefit to the assessee, firstly for the reason that leased premises is for temporary period and nature of expenses are purely in nature of repairs. In fact such kind of repairs and renovation expenses on leased premises has been held as revenue expenditure by the various courts as relied upon by the ld. counsel. Accordingly, I hold that expenditure incurred by the assessee is allowable and the additions made by the Assessing Officer are deleted. 10. Such an addition or disallowance cannot be made u/s 40(a)(ia), because the major expenses relates to purchase of material and labour payments are for petty amounts, on which TDS liability is not attracted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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