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TMI Blog2024 (6) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... given by the assessee to find that the nature of the expenses incurred by the assessee was capital in nature. We also find that neither in the grounds of appeal before the First Appellate Authority nor before the Tribunal was there any material produced by the assessee to show that the expenses incurred by them were revenue in nature. If the assessee had in fact a case that the expenditure incurred by it was revenue in nature, then it was for the assessee to produce materials that would clearly demonstrate that the expenditure was revenue in nature. This not having been done at any stage before the First Appellate Authority or the Appellate Tribunal, we see no reason to interfere with the impugned order of the Tribunal which merely endorse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital expenditure and not revenue expenditure. In the appeals before us, the appellant raises the following questions of law: a) Whether on the facts and in circumstances of the case the Tribunal is justified in confirming the disallowance of the claim for deduction of the cost of repairs and additions incurred on buildings in leasehold premises amounting to Rs. 1,01,87,412/-? b) Whether on the facts and in the circumstances of the case, there is any material or evidence on record to justify the finding of the Appellate Tribunal that the sum of Rs. 1,01,87,412/- cannot be allowed as deduction for the assessment year in question? 3. We have heard Sri. Abraham Joseph Markos, the learned Counsel for the appellant and Sri. Jose Joseph, the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation on capital component of expenditure. Aggrieved the assesee is in further appeal before us. 6.2. From the facts, it emerges that the assessee has incurred expenditure on existing building which is erected on leased land. This being so, Explanation-1 would apply since the nature of expenditure is capital expenditure. Therefore, the expenditure is to be capitalized and depreciation would be allowable to the assessee. The Ld. AO is directed to allow depreciation on this expenditure. The asessee is directed to provide requisite details. This ground stand partly allowed. 5. The learned Senior Counsel for the appellant would point out that the Appellate Tribunal merely went by the Explanation-1 to Section 32 (1) of the Income Tax Act ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority and the First Appellate Authority. The orders of the Assessing Authority and the First Appellate Authority clearly discuss the claim made by the assessee and find that, based on the description of the expenses as given by the assessee, the expenses had to be treated as capital expenditure and not revenue expenditure. He points out therefore that, the Tribunal had in fact endorsed the findings of the authorities below, on facts, as regards the nature of expenses incurred by the assessee and it did not mechanically apply the provisions of Explanation-1 to Section 32 (1) of the IT Act. 7. On a consideration of the rival submissions, we find force in the submission of the learned Standing Counsel for the Income Tax Department for we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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