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TMI Blog2022 (11) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court in S.A. Builders Ltd. Vs CIT [ 2006 (12) TMI 82 - SUPREME COURT] thus we find no infirmity with the disallowance made on this count, ergo ground number 1 stands dismissed. Repairs maintenance expenditure - Revenue or capital expenditure - HELD THAT:- In the present case before us, it is an admitted fact that, the appellant has occupied the premises on short term lease in a disfigured condition and carried out the extensive repairs to convert the same into workshop and showroom so has to suit its business operation to be carried therefrom under a dealership specification, but without bringing into existence any capital field / asset or rights therein, except enduring usage over a short period of lease, which naturally subjected to pre-termination, consequently no control over the term of enduring usage as well. And the question as to whether or not such extensive repairs is of enduring nature is extensively dealt in the case of Alembic Chemical Works Co.[ 1989 (3) TMI 5 - SUPREME COURT] For the purpose of allowability of any expenditure under the Act, what is material is the classification between the capital and revenue and the same-does not recognis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant is a private limited company holding authorized dealership of Hyundai Motors, has for the AY 2013-14 filed its return of income [for short ITR ] on 30/09/2013 declaring income of ₹1,09,70,250/-, wherein the case was subjected to CASS by service of notice u/s 143(2) and considering the submissions of the assessee, the assessment was culminated u/s 143(3) with additions viz; disallowance of depreciation on demo car, disallowance of interest u/s 36(1)(iii) for diversion of interest bearing funds, disallowance u/s 40a(ia) and disallowance of repairs maintenance holding as Capex. 4.2 The assessee company challenged the action of Ld. AO contesting all the addition before the first appellate authority [for short FAA ], wherein the Ld. CIT(A) finding force in assessee s contention granted part relief as regards to depreciation on demo car following precedents laid in assessee s own case for earlier years and conceded with the balance action of Ld. AO in confirming other additions. Consequently, against sustained additions / disallowances the appellant company is in appeal before this Tribunal on effectively two grounds set in para 3 hereinbefore. 5. During the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to either parties. 8. First thing first, in so far as the delay of 82 days in instituting the present appeal is concerned, we having regards to facts circumstance, find force in the submission of the appellant establishing the sufficiency of reason in belated filing, consequently in the light of decision of Hon ble Apex Court in Collector Land Acquisition Vs MST Katiji and Others reported at 167 ITR 5 (SC) and Hon ble Bombay High Court in CIT Vs Velingkar Brothers reported at 289 ITR 382 (Bom), the delay stands condoned in the larger interest of justice. 9. We shall now deal with ground number 1 9.1 Without reproducing the provision of applicable section in verbatim, it shall purposive to state that, by the residuary head of deduction u/s 36, the assessee while computing its taxable income under chapter IV - D of the Act, is entitled to a claim of deduction for the amount of interest paid in respect of capital borrowed for the purpose of business by virtue of clause (iii) of sub section (1) thereunder. In the extant appeal, it be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on account of repairs to building when occupied as tenant and used for the purpose of building, as against current repairs when occupied otherwise than tenancy and for the sake of clarity its apt to reproduced the text thereof as under; 30 Rent, rates, taxes, repairs and insurance for building, (a) Where the premises are occupied by the assessee- (i) As a tenant, the rent paid for such premises: and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs; (ii) Otherwise than as a tenant, the amount paid by him on account of current repairs to the premises. 11. Bare reading of the provision sufficiently clenches that, when a premises in a disfigured or dilapidated condition is occupied by the assessee, all extensive repairs meant to include current or otherwise undertaken by the assessee for making such premises tenable vis-a-vis habitable for business, unless such extensive repairs brings into existence any capital field or rights therein, shall pass the litmus test laid in sub-clause (i) of section 30(a) of the Act and accordingly the allowance. 12. In the present case before us, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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