9911796707
TMI Blog2020 (12) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... ation fee at the time of registration of tenancy agreement. 3. Brief facts are, the assessee is a resident company. For the assessment year under dispute, the assessee filed its return of income on 1st November 2013, declaring total income of Rs. 16,68,789. In the course of assessment proceedings, the Assessing Officer on verifying the facts and material on record found that the assessee earlier was engaged in manufacturing of food grade colours and chemicals. For such manufacturing activity, it had two units, one at Goregaon and the other at Tarapur. However, due to accumulated loss and erosion of networth, the assessee became sick and was declared as a sick industrial unit by the BIFR and a rehabilitation package was also formulated. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enancy rights as capital asset, the Departmental Authorities have completely missed out the aforesaid factual position. The learned Counsel submitted, the Departmental Authorities have also ignored the fact that the tenancy agreement has been executed under the provisions of Maharashtra Rent Control Act, 1999 and the assessee, as per the terms of the agreement, has to pay monthly rent of Rs. 15,000, which has also been allowed by the Assessing Officer. Thus, he submitted, the expenditure incurred by the assessee is allowable. In support of such contention, the Authorised Representative relied upon the following decisions:- i) Balmer Lawrie & Co. Ltd. v/s CIT, 111 taxman.com 316 (2019); ii) CIT v/s Bombay Cycle & Motor Agency Ltd., 118 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessee on 18th March 2013. The aforesaid tenancy agreement makes it very much clear that the assessee's right is only that of a legal tenant. The agreement further stipulates that the assessee has to pay a monthly rent of Rs. 15,000, excluding statutory dues and water charges. However, if the landlord raises a bill for statutory dues, the assessee has to pay it. The agreement further makes it clear that in case of delay in payment of rent, the assessee would be liable to pay interest @ 18% on the outstanding dues. Thus, from a reading of the tenancy agreement, prima facie, it appears that the assessee's right under the agreement is that of the monthly tenant. Further, the tenancy agreement prohibits the assessee from making any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lude that the assessee has acquired enduring right over the property, however, the terms of the tenancy agreement speak differently. If one goes by the tenancy agreement, there cannot be any doubt that there is no perpetual right granted to the assessee. In view of the aforesaid, we hold that the expenditure incurred by the assessee towards stamp duty and registration charges for registering the tenancy agreement is revenue in nature and allowable. Accordingly, we direct the Assessing Officer to delete the addition. Ground no.1, raised by the assessee is allowed. 9. In ground no.2, the assessee has challenged disallowance of expenditure amounting to Rs. 33,35,091. 10. As discussed earlier, while verifying the facts and material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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