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2016 (2) TMI 88 - AT - Income TaxDisallowance of interest expenditure u/s 43B - Held that:- In the paper book, the assessee has not furnished the “Object clauses” of MMRDA. There should not be any dispute that the object clauses shall determine the nature of MMRDA and only if one examines the object clause, he can decide as to whether it falls in any of the categories prescribed in sec. 43B of the Act. Accordingly, in our view, this issue requires fresh examination at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to adjudicate this issue afresh by examining the object clause of MMRDA and whether it shall fall in any of the categories of financial institutions prescribed in sec. 43B of the Act and there after decide about the applicability of the provisions of sec. 43B to the impugned interest payment. Disallowance of Repairs expenditure of Studio No.3 - Held that:- There is no dispute with regard to the fact that the fire occurred long back in the year 2002 and even after the said occurrence and damage, the assessee has proved that it has continued to give Studio No.3 on hire and earned income. That very fact shows that the Studio No.3 was not completely damaged by fire. Hence, we are of the view that there is merit in the submissions of the assessee that the expenditure of ₹ 35.37 lakh was incurred only to preserve Studio No.3 by carrying out repair works. Further, no material was brought on record by the assessing officer to show that the assessee has built any new asset by incurring this expenditure. Under these set of facts we are of the view that the expenditure incurred by the assessee should be allowed as revenue expenditure. Accordingly, we set aside the order of ld. CIT(A) on this issue and direct the AO to delete the disallowance.- Decided in favour of assessee Disallowance of road repairs expenses - Held that:- . We notice that the assessee is holding an area of 512 acres of land and it is submitted that there is huge stretch of road therein. We notice that the assessing officer has not brought any material to show that the assessee has built any new road. According to the assessee, it has incurred expenditure to re-surface the existing roads. Hence it is a case of maintenance of existing asset, in which case, the same is allowable as revenue expenditure. Hence the decisions relied upon by Ld CIT(A) are not applicable to the facts of the instant case. Though the ld.CIT(A) has taken the view that the expenditure incurred by the assessee would give benefit of enduring nature, yet the very fact that the assessee is required to incur expenditure every year to maintain the road of huge stretch shows that the assessee is not enjoying enduring benefit. Further, it is a known fact that the roads are damaged by wear and tear by passage of time and also due to rain. Further, it is stated that, during the course of film shooting also roads are damaged to erect temporary structure and also due to usage of heavy equipments. Hence, we find merit in the contentions of the ld.AR that the expenditure incurred on re-surfacing of roads is revenue in nature - Decided in favour of assessee
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