TMI Blog2013 (12) TMI 891X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 - - - Dated:- 11-10-2013 - N Barthvajasankar And George George K, JJ. For the Appellant : Shri Vinay Mruthyunjaya, FCA For the Respondent : Shri Bijoy Kumar Panda, DR ORDER:- PER : George George K This appeal at the instance of the assessee is directed against the CIT(A) s order dated 05.01.2012. The relevant assessment year is 2005-06. 2. The effective grounds raised read as follows: "2 The Hon'ble CIT (A) has erred in partially upholding the addition made by the AO on account of Hoarding Maintenacne Expenses treating it is capital in nature to the extent of 50% of the total expenditure. Here the CIT (A) has failed to appreciate the facts and the documents produced substantiating such expenditure. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding Maintenance Expenditure for purchase of steel. It is but natural that Hoardings are to be maintained and sometimes steel components may also be required. Considering the facts, 20% of the above quoted expenditure is allowed as revenue expenditure on account of normal wear and tear which works out to Rs.30,51,622/-. The balance amount of Rs.1,30,06,490/- is hereby capitalized and added back, on which assessee is eligible for depreciation as per the income tax Act Rules. While doing so, I would like to clarify that assessee has also been allowed repair and maintenance expenditure of Rs.40,14,192 (2,02,72,305-1,62,58,113) over and above Rs.30,51,622/-". 4. Aggrieved by the addition, the assessee carried the matter in appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into with BBMP for putting up Median Hoardings is for a period of four years and, therefore, the expenditure incurred for the current year would generate income to the assessee for future years also and a portion of the expenses has been rightly capitalized. 6. We have heard the rival submissions and perused the relevant materials on record. The assessee generates income from advertising hoardings which have primarily of three types (i) Board Hoardings - Own, (ii) Board Hoardings - Leased (iii) Median Hoardings - leased (introduced during the relevant assessment year). The details of the hoardings erected, leased and maintained by the assessee for the past few years and current years are as follows: Particulars AY 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier, the expenses for putting up new median hoardings has generated income to assessee not only for this concerned assessment year but also for the next three succeeding assessment years. Therefore, there was nothing wrong in the Income Tax authorities in treating a part of the expenses as capital in nature and granting depreciation on the same. 6.3 However, we have notice that the CIT (A) has disallowed 50% of the total expenditure out of the hoarding maintenance expenses of Rs.2,02,72,305/-, whereas the Assessing Officer had disallowed 80% of the expenses comprising of steel purchases of Rs.1,62,58,113/-. The fact of the matter is that the steel purchase of Rs.1,62,58,113/- was only a subject matter of appeal before the CIT (A) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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