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2017 (3) TMI 111 - HC - Income TaxLegal and professional fees - allowable business expenditure - Held that:- As during the period of construction of two additional floors, a temporary operational plan had to be prepared providing for alternative access to and exit from the Hotel. This without compromising on the high standard expected by customers in respect of ambiance and comforts in a Five Star Hotel. The respondent-assessee had engaged a professional interior designer to plan temporary access and exit from the Five Star Hotel and for which an amount of ₹ 22.44 lakhs was paid. This expenditure which was incurred by the respondent was necessary for carrying on business as it resulted in increased turnover in the subject Assessment year as compared to the earlier years. Therefore, this expenditure is allowable as deduction under Section 37(1) of the Act as revenue expenditure. The balance of ₹ 23.99 lakhs has been held by the Tribunal to be expenses incurred in normal / regular running of its business and therefore allowable as revenue expenditure under Section 37(1) of the Act. Amounts incurred for repairs of Hotel Building - Held that:- We find that the Tribunal, on examination of nature of expenditure and result of the expenditure in the context of the respondent-assessee's activity of running Five Star Hotel has determined which expenses could be considered as revenue and which as capital in nature. After giving a finding on principle on each of the items of expenditure, the impugned order has restored the issue to the Assessing Officer to pass appropriate orders.The entire exercise carried out by the Tribunal results in a finding of fact and this is not shown to us to be perverse in any manner.
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