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2014 (8) TMI 70 - ANDHRA PRADESH HIGH COURTDepreciation - Expenses on construction of building on leasehold land – Applicability of section 32(1A) – Held that:- The expenses incurred by the assessee falls into the second category – Following the decision in CIT Vs. MADRAS AUTO SERVICE PVT. LTD [1998 (8) TMI 1 - SUPREME Court] - unless the expenditure incurred for construction of the building is treated as capital expenditure, the question of her claiming the benefit u/s 32 (1A) does not arise - The Act does not maintain any distinction as to the purport of capital expenditure with reference to different provisions - Either it has to be treated as capital expenditure for all purposes covered by the Act or not at all – Decided in favour of Revenue. Rents received from building property on leasehold land – Income from business or house property – Held that:- Assessee was treated as lessee, may be for a period of 30 years and for certain years, the income derived from the building was treated as the one from business -The construction of the building on the land taken on lease was obviously for the purpose of business and not with an intention to own it - If the intention of the respondent was to own the property, the transaction would have been different altogether - Though the lease is one of the forms of transfer of property, it does not lead to conferment of rights of ownership - That would be possible only when a sale as defined under Section 54 of the Transfer of Property Act takes place – income to be treated as business income - Decided against Revenue.
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