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2019 (12) TMI 145 - AT - Income TaxDisallowance of expenditure incurred on account of furniture and fixtures - premise was sealed and could not be used for business activity - AO disallowed the entire expenses by taking view that the assessee incurred expenditure which is capital in nature and hit by the provision of section 37(1) - HELD THAT:- CIT(A) upheld the action of AO of impugned order and granted part relief to the assessee on the expenses incurred on certain items. We have noted that the lower authorities has not disputed that assessee has obtained a tenanted premises for running its business for setting up a Studio. Further, there is no dispute that the premises could not be utilized as its user from Warehouse to office premises was not sanctioned by BMC. The premise was sealed in the month of October 2008. The leave and licence agreement was executed on 01.05.2008. The assessee has claimed expenses which consist of furniture and fixture fixing of interior, installation of water and electricity connection, fencing of the tenanted premises. Assessee fairly submitted that ld CIT(A) has granted substantial relief to the assessee. We have noted that order giving effect to the order of ld CIT(A) is not placed on record The assessee has furnished the break-up of all these expenses, details of which are available at page no. 213 of Paper Book. We find merit in the submissions assessee, that the assessee despite incurring huge expenditure could not use the tenanted premises for its business purpose and the expenses incurred by the assessee are allowable expenses. Therefore, the issue is restored back to the file of assessing officer to verify the remaining expenses which were incurred on repair / maintenance for use of tenanted preemies and allow appropriate relief to the assessee in accordance with law. Needless to say that before passing the order, the Assessing Officer shall grant opportunity to the assessee to substantiate the claim / expenses. In the result, this ground of appeal is allowed for statistical purpose. Claim of bad-debt in the nature of revenue expenses - AO disallowed the claim by taking view that suit filed by landlord has not attained the finality - CIT(A) upheld the action of Assessing Officer holding that the assessee has not fulfill the requirement of section 36(2) - HELD THAT:- Considering the fact that the assessee has made the payment by the order of Civil Court and the fact that this plea is raised before the Tribunal for the first time, therefore, this ground of appeal is restored to the file of Assessing Officer to verify the payment made by the assessee in compliance of order of small cause court dated 23.10.2015 and grant appropriate relief to the assessee before giving effect to the direction of this order, the Assessing Officer is directed to grant opportunity to the assessee. In the result this ground of appeal is allowed for statistical purpose.
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