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2006 (8) TMI 243 - AT - Income TaxDeduction claimed on account of renovation of office premises - lease office - Capital Or Revenue Expenditure - HELD THTA:- We are of the view that the expenditure being in the nature of extensive renovation and beautification, acquisition of furniture, plant and machinery has rightly been disallowed as capital expenditure by the learned AO and the learned CIT(A). We estimate that if 5 per cent of the expenditure as claimed by the assessee is allowed, the same would adequately cover the expenditure incurred by the assessee on repairs of the premises leased out to the assessee. The balance expenditure should suitably be divided between the building, furniture, plant and machinery and the assessee should be allowed depreciation at corresponding rates. For that limited purpose we restore this issue to the file of the learned AO who would work out depreciation allowable to the assessee under Expln. 1 to s. 32(1) in the light of our order and after allowing the assessee reasonable opportunity of being heard in the matter. The assessee's grounds of appeal in this respect for all the three years are disposed of accordingly. Disallowance of a sum of commission and brokerage expenses - HELD THAT:- On consideration of the matter we hold that the assessee has furnished all primary details from which it appears that the assessee has incurred the expenditure in the ordinary course of carrying on of its business. No specific material has been relied upon by the Revenue for the finding given that the expenditure incurred was on the higher side. The persons to whom the payments have been made are unrelated persons and therefore, it appears that the transactions have been carried out at arm's length. We therefore direct that the full deduction as claimed by the assessee in this behalf of Rs. 6,97,800 should be allowed to the assessee. In the result, while the appeals filed by the assessee are partly allowed, appeals filed by the Revenue are dismissed.
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