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2012 (9) TMI 801 - AT - Income TaxDisallowance of expenditure on repairs to furniture and fixture - CIT(A) allowed it - By examining the invoices and other details of the expenses, it can be noticed that no new asset was created. The labour was engaged for replacement of old wooden panel and repair of the damaged furniture. On the basis of these facts, it can be held that the assessee being in hotel industry, therefore the expenditure incurred for interior decoration with a view to provide a comfortable stay to customers, the expenditure was nothing but revenue in nature allowable u/s.37. By the study of the nature of expenditure, it can be ascertained whether the assessee has started a new line of revenue generation or started getting an altogether new advantage of enduring benefit. Therefore, it can be concluded that substantial repair may be advantageous for retaining an existing asset but such an enduring benefit may not lead to a conclusion that a capital asset has been created through which a new enduring advantage was created, thus expenditure in question was a business requirement as decided by the assessee to incur such huge expenditure on commercial consideration - in respect of hotel industry it was held that even the modernization of hotel building is allowable as revenue expenditure because such an expenditure was found to be incurred with a view to create a conducive and beautiful atmosphere for running hotel business - in favour of assessee.
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