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2020 (1) TMI 80 - ITAT DELHIDisallowance on account of Lease hold rent paid - Nature of expenditure - revenue or capital expenditure - HELD THAT:- The asset which was created belonged to somebody else and the company derived an enduring business advantage by expending the amount. The expenses have been looked upon as having been made for the purpose of conducting the business of the assessee more profitably or more successfully. Since the asset created by spending the amounts did not belong to the assessee but the assessee got the business advantage of using modern premises at a low rent, thus saving considerable revenue expenditure for several years, such expenditure should be looked upon as revenue expenditure. In the present assessee’s case as well, the expenses have been looked upon as having been made for the purpose of conducting the business of the assessee. The onetime payment of the annual rent as per the lease deed is rightly claimed by the assessee as revenue expenditure. AO was not right in holding that the payment during the year relates to land which is capital in nature. In fact, the assessee is running the mall and hotel constructed on the lease land of Jaipur Development Authority which was given to Vishnu Apartments Private Ltd. In fact, the mall and hotel was constructed by the Vishnu Apartments Private Ltd. The CIT(A) also ignored this fact. Therefore, the order of the CIT(A) is set aside. The Appeal of the assessee is allowed.
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