Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 215 - AT - Income TaxDepreciation @ 10% on improvements carried out in the lease hold premises - Assessee claimed 100% depreciation on the leasehold improvements as the improvements were of the nature falling within the ambit of part-A in Appendix-I to the Income Tax Rules, 1962 (Rules) under the head ‘Tangible assets’ entry (4) “Purely temporary erections such as wooden structure” - HELD THAT:- As rightly observed by the CIT(A), the very fact that the assessee has claimed depreciation on the lease hold improvements only means that the assessee has treated the expenditure incurred on lease hold improvements as capital expenditure. Learned Counsel however made a submission that the treatment in the books of accounts is not final and determinative. While we agree with this proposition that treatment in the books of accounts is not conclusive but we observe that the issue whether the expenditure is capital or revenue is nature has not been examined by the lower authorities. In this regard, we find that though a specific ground viz., ground No.8 was raised by the assessee before the CIT(A) in this regard, the CIT(A) did not examine this issue specifically. The ingredients and prerequisites of a capital expenditure or revenue expenditure would remain the same, and not undergo any change depending on whether the building is owned or occupied as lessee or other occupancy rights leased premises. As already stated this issue though raised by the assessee before the CIT(A) and the grounds of appeal No.9 to 12 before the Tribunal as an alternative ground has not been examined by the CIT(A). In these circumstances, we are of the view that the issue needs to be set aside for fresh consideration by the CIT(A) as to whether the expenditure in question is capital or revenue in nature. We therefore allow this appeal for statistical purposes by remanding the said issue for consideration by the CIT(A). In this regard we find that the decision cited by the learned Counsel for the assessee in assessee’s own case for Assessment Year 2001-02 which relates to issue whether the improvements to lease hold premises were capital or revenue in nature, would become relevant. Appeal of the assessee is allowed for statistical purposes.
|