TMI Blog1992 (9) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... anitary fitting and maintenance and it was argued that these expenditures are connected with the running of the business and were incurred to keep up the standard and prestige of the Restaurant which necessitated repainting, repairs and publishing. The CIT (Appeals) was not satisfied with this explanation and confirmed the order of the ITO. Learned assessee's counsel Shri Vinod Chandiok, CA invited our attention to the details of expenditure given at pages 4, 47 and 83 of the paper book and from the details it was pointed out that none of the expenditure is capital in nature. It is also pointed out that whatever expenses were in the nature of capital, those expenses have not been claimed as expenditure of revenue nature. 3. As against this, the learned departmental representative supported the action of the CIT (Appeals) and from details, it is pointed out that major expenditure has been incurred on painting, plastering, bricks, stones, earth work and lay out PVC pipes etc. These are expenses of capital in nature and it gives enduring benefit to the assessee. Therefore, the deductions were rightly refused. 4. We have considered the rival submissions. From the details filed at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs. 2,14,656. As explained by the assessee in its letter dated 20-2-1989 to the Assessing Officer, total expenditure of Rs. 1,07,229 was incurred to "give the restaurant a fresh attractive outlook.........on decorations including making small partitions and panelling etc. etc.". The entire amount I was treated as capital expenditure by the authorities below. 8. The Supreme Court in CIT v.British IndiaCorpn. Ltd. [1987] 165 ITR 511 at 56 held that no test of universal application can be laid down in deciding whether a particular, expenditure is capital in nature or not. Moreover, each item of expenditure cannot be considered in isolation. On the other hand, all items of expenditure have to be considered in their totality and an integrated view formed about the nature of such expenditure. If the facts of the instant case are analysed in the light of the above principles then the entire expenditure of Rs. 1,07,229, according to me, was capital in nature for the following reasons:-- (i) The providing of partitions, the change of decor, the repair of the newly purchased building, the replacement of wires, the fittings of sanitary items, the provision of panelling etc. were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,07,229 on what was described as interior decoration. The details of this expenditures were furnished in the paper book on pages 4, 47 and 83, While there was no dispute about the incurring of this expenditure, the controversy arose to the nature of the expenditure. Barring a sum of Rs. 21,092 which was treated as capital expenditure by both the Members on which there was no difference of opinion, the balance of the expenditure of Rs. 86,137 was treated as revenue expenditure by the learned Judicial Member whereas the learned Accountant Member held it to be capital expenditure. That was how the difference of opinion arose between the learned Brothers and that the difference was referred to me as a Third Member in the following terms: "1. Whether on the facts and, in the circumstances of the case, the expenditure claimed to have been incurred on repairs and replacement on a building purchased from NOIDA Authority during the assessment year under consideration to the extent of Rs. 1,107,229 is a capital expenditure or it is partly capital and partly revenue in nature? 2. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 86.137 (Rs. 1,07,229 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit. It is bound to get dirty, spoiled, mutilated in course of time and needs constant replacements and also re-adjustments and perhaps redoing in its entirety. I am told during the course of hearing that in the immediately next assessment year, another sum of Rs 1 lakh was incurred on interior decoration and that amount was allowed as a deduction. This supports the view that interior decoration is not of a permanent nature and it cannot be taken to be like renovation or repairs of an enduring nature. That the expenditure incurred was on interior decoration is proved by the details given on pages 4, 47 and 83 of the paper book. They are: ------------------------------------------------------------------------------------ Particulars Amount Rs. ------------------------------------------------------------------------------------ Wages/Mali Beldar Cement, Pathri, Hexa, Rodi, Dust, Reta. 3,792.20 Badarpur, Stone Dust, Reta, Rodi, Bugi, Jira, Cement. 1,829.00 Bam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,697.50 Brass Fitting, wash basin, Steel tube, Nipple, Union, G.I. Elbow. G.M. Gate, M.S. Brush, G.I. Elbow, Nipple, Steel tube, G.R. Socket, S.W. Pipe, C.P. Sink, Mixer, M.S. Bush, G.M. Gate Valve, Steel tube, G.I. Elbow, C.P. Angle, G.I. Socket. 6,329.44 Copper pipe, Elbow Cr. Jali Nails, West Pipe, Steel Tap. 800.49 Nails for Plumbing work. 30.00 Elbow, Steel Tube, Plumbing material, Socket, Meter Oil, Cement. Gate Value, Lubricating Oil, Plumber Goods. 6,510.71 -------------- 19,587.14 -------------- Less: Amounts capitalised from above. (pages 84 and 86). 3,085.00 -------------- 16,502.14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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