TMI Blog2018 (6) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... Expenses towards repairs & Maintenance of building - capital or revenue in nature - Held that:- If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future - hence after considering the nature of each and every expenditure the CIT(A) reached to the finding that expenditure so incurred on repair etc., was Revenue in nature - appeal of revenue is dismissed - Decided in favor of assessee. - ITA No.3272/Mum/2016 And ITA No.2078/Mum/2016 - - - Dated:- 12- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me earned by the assessee and it was contended that disallowance u/s. 14A with regard to the interest expenditure should be computed with reference to the net interest expenditure incurred by the assessee. Meaning thereby interest income so earned should be reduced from the interest expenditure and the net interest expenditure should be considered for computing the disallowance. Reliance was placed on the decision of Gujarat High Court in case of Nirma Credit Capital (P) Ltd., 85 Taxmann.com 72, wherein it was held that for the purpose of applying the factors contained in Clause (ii) of Sub-rule (2) of the Rule 8D prior to its amendment with effect from 02/06/2016, amount would be considered as amount of expenditure by way of interest wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Mumbai Bench of the Tribunal in Paresh K. Shah (supra) has been accepted by the Revenue. In any case, no distinguishing features in facts or law has been poin ted to us from those in the case of Paresh K. Shah (supra) which would justify the disallowance on the gross interest paid and not on net interest. (b)In the above view, question no.(i) as proposed does not give rise to any substantial question of law. Thus not entertained. 8. Respectfully following the above judicial pronouncements we are in agreement with the contention of learned AR that disallowance u/s.14A should be made with respect to the net interest expenditure. Accordingly, AO is directed to recompute the disallowance on the net interest expenditure after gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... airing, plastering etc. Such expenses have been carried out by the contractor using the other material as allowed by A.O. as revenue expenditure. The CIT(A) has dealt with issue threadbare and after applying various judicial pronouncements observed that while allowing the expenditure as capital or Revenue, one has to look at the expenditure from a commercial point of view and that not every advantage of enduring nature constitutes capital expenditure. The CIT(A) further observed that what is material to consider is the nature of the advantage in a commercial sense and it is only where the advantage is in the capital field that the expenditure would be disallowable. If the advantage consists merely in facilitating the assessee's trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue expenditure. The expenditure incurred by assessee on repairs to improve bad condition of building which was used for its business purpose was to be allowed as business expenditure. 3. In the case of CIT .v. DBS Corporate Services (P.) Ltd. (2014) 222 Taxman 31 (Mag.) (Bom.)(HC) Hon'ble Mumbai High court allowed such expenditure as revenue. 4. Similar View was taken by the Hon'ble High court in the case of CIT v. Manohar Lal Hira Lal Ltd. (2013) 219 Taxman 161 (Mag,) (AII.)(HC) and allowed expenses incurred for Repairs - Replacement of broken AC sheets, wall plaster, tools and dies as revenue expenditure. 5. In the case of CIT v. H. P. Global Soft Ltd. (2012) 349 ITR 462 / 208 Taxman 275 / 248 CTR 201 / 66 DTR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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