2011 (3) TMI 1710 - AT - Income Tax

Summary

Issues involved: Appeal against CIT(A) order for assessment year 2005-06 regarding rejection of claim for retention money and deduction of proportionate leasehold premium.

Retention Money Issue:
The Tribunal noted that the issue of retention money had been previously decided against the assessee in a different case. Citing consistency, the Tribunal decided the issue against the assessee. The ground related to retention money was dismissed.

Proportionate Leasehold Premium Issue:
The AO disallowed the deduction claimed by the assessee for proportionate leasehold premium. The CIT(A) upheld the AO's decision. The assessee argued that the issue was covered by a decision of the Hon. Gujarat High Court in a specific case. The Tribunal referred to the findings of the Hon. Gujarat High Court, which concluded that the lease rent paid by the assessee was allowable as revenue expenditure. The Tribunal also mentioned that the Special Leave Petition filed by the Revenue was dismissed by the Hon. Supreme Court, affirming the decision of the Gujarat High Court. Consequently, the Tribunal decided this issue in favor of the assessee.

Conclusion:
The Tribunal upheld the decision against the assessee regarding the retention money issue, as it had been previously decided against them. However, the Tribunal ruled in favor of the assessee regarding the deduction of proportionate leasehold premium, based on the decision of the Hon. Gujarat High Court and the dismissal of the Special Leave Petition by the Hon. Supreme Court.