Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2012 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (6) TMI 540 - HC - Income TaxLeasehold property - Whether expenditure incurred by the assessee by way of electrical work, civil work and interior decoration is in the nature of the revenue expenditure - assessee contended that the expenditure incurred are in respect of leased properties and they do not give to the assessee the benefit of enduring nature and the amount spent was for business purpose and not for acquisition of the capital asset – Held that:- for the purpose of section 32, which provides for depreciation, if the condition No. 1 is satisfied by a legal fiction, the lessee becomes the owner of the structure constructed on lease premises. Therefore any expenditure incurred for civil work by a lessee in respect of the lease premises, without any further proof cannot be said to be a capital expenditure or revenue expenditure. it is necessary to find out the nature of construction put-up, the purpose of construction and the use to which the said construction is put-up and also if it is a case of repair, replacement, addition or improvement has to be gone into. assessee has not stated the nature of civil works constructed, the nature of interior decoration made to the leasehold premises and also the nature of electrical work undertaken. Tribunal without going into the question as to the nature of civil work, electrical work and interior decoration done to the lease premises has proceeded on the assumption that it constitutes a revenue expenditure. matter is remanded to the assessing authority to consider whether the said expenditure is revenue expenditure or capital expenditure
|