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Showing 321 to 340 of 7386 Records
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2025 (5) TMI 1199
Extension of time limits for adjudication of show cause notices - Validity of Section 16 (2) (c) of the Central Goods and Service Tax Act, 2017 (‘CGST Act’) and Notification 56/2023-Central Tax - procedural requirements under Section 168A of the CGST Act for issuance of SCN - Challenge to SCN and impugned order - HELD THAT:- Considering the present writ petition has been pending before this Court for several months, it is made clear that the Appellate Authority shall not dismiss the appeal on the ground of limitation and adjudicate the same on merits.
All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to enable access to the notices and related documents.
However, it is clarified that the issues in respect of the validity of (i) the impugned notification and (ii) Section 16 (2) (c) of CGST Act are left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court in ‘M/s HCC-& Ors’ [2025 (4) TMI 60 - SC ORDER]; and in Bharti Telemedia v. Union of India & Ors.
The petition is disposed of in these terms.
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2025 (5) TMI 1198
Extension of time limit of issuance of SCN u/s 73 / 74 - Validity of Central and State Tax Notifications Nos. 9/2023 and 56/2023 - procedural requirements under Section 168A for prior to the issuance of notifications - No opportunity to file a reply to the SCN - Challenging the SCN and impugned order - HELD THAT:- Since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
Accordingly, the impugned order is set aside.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the SCN shall be passed accordingly.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in Engineers India Limited v. Union of India &Ors.[2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of
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2025 (5) TMI 1197
Extension of time limit of issuance of Show Cause Notice (SCN) u/s 73 / 74 - Validity of the Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax as also the Notification No. 9/2023-State Tax and Notification No. 56/2023-State Tax - procedural requirements under Section 168A for prior to the issuance of notifications - No opportunity to file a reply to the SCN -Challenge to SCN and impugned order - HELD TAHT:- In the present case, the submission of the Petitioner, on facts, is that the impugned order has already been challenged by the Petitioner before the appellate authority in accordance with Section 107 of the Central Goods and Service Tax Act, 2017 and the mandatory pre-deposit has already been furnished before the appellate authority.
Hence, in light of the said facts, it is directed that the appeal filed by the Petitioner shall be adjudicated upon merits by the appellate authority and the same shall not be dismissed on the ground of limitation.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the appellate authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. [2025 (4) TMI 60 - SC ORDER] and this Court in Engineers India Limited v. Union of India &Ors.
The present petition is disposed of in said terms.
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2025 (5) TMI 1196
Extension of time limit of issuance of Show Cause Notice (SCN) u/s 73 / 74 - validity of Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification - Order passed in haste without duly considering the reply as well as the documents - Challenging the SCN and impugned order - HELD THAT:- Upon considering the impugned order, this Court is of the opinion that the same does not merit any interference of this Court and a challenge, if any, shall be taken up by the Petitioner before the appellate authority in appeal.
Accordingly, the Petitioner is granted time till 10th July, 2025, to file an appeal before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017.
If the appeal is filed by the Petitioner before 10th July, 2025, along with the mandatory pre-deposit, the same shall be adjudicated upon merits and shall not be dismissed on the ground of limitation.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the appellate authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.[2025 (4) TMI 60 - SC ORDER].
The present petition is disposed of in said terms.
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2025 (5) TMI 1195
Extension of time limit of issuance of SCN u/s 73 / 74 - Validity and vires of Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification - No knowledge of the issuance of the SCN - Cancellation of GST Registration - Challenging the SCN and impugned order - HELD THAT:- This Court is of the opinion that since the Petitioner has not had an opportunity to file a reply. In addition it has not been afforded an opportunity to be heard and the impugned order has been passed without a contest on merits.
Accordingly, the impugned order is set aside.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed.
However, it is made clear that the issue in respect of the validity of the impugned notification is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. [2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of
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2025 (5) TMI 1194
Extension of time limit of issuance of Show Cause Notice (SCN) u/s 73 / 74 - Validity of Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification - Challenging the SCN and impugned order - - HELD THAT:- In view of the fact that the GST returns for the year 2019-2020 have been filed belatedly and the Petitioner had full knowledge of the issuance of show cause notice and the consequent impugned order, the present petition does not merit consideration. However, in the opinion of this Court, the Petitioner ought to be given a chance to raise a challenge before the appellate authority.
Accordingly, the Petitioner is granted time till 10th July, 2025, to file an appeal before the appellate authority under Section 107 of the Central Goods and Service Tax Act, 2017.
If the appeal is filed by the Petitioner before 10th July, 2025, along with the mandatory pre-deposit, the same shall be adjudicated upon merits and shall not be dismissed on the ground of limitation.
However, it is recorded that the issue in respect of the validity of the impugned notification has not been pressed by the Petitioner.
The present petition is disposed of in said terms.
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2025 (5) TMI 1193
Extension of time limit of issuance of SCN u/s 73 / 74 - validity of Notification Nos. 09/2023 (Central Tax) and 56/2023 (Central Tax) - procedural requirements under Section 168A for prior to the issuance of notification - non-participation in hearings and non-filing of replies - form GST DRC-01A issued as mandated under Rule 142(1A) - Challenging the SCN and impugned order - HELD THAT:- The Court has perused the records. It is noticed that prior to the issuance of impugned SCN, a notice in form GST ASMT-10 was issued by the Respondent-GST Department on 1st February, 2023 in regards to the same subject matter (i.e., to scrutinise the returns for the period April 2018 to March 2019 under Section 61 of the CGST Act, 2017). The Petitioner is stated to have filed a reply for the same in form GST ASMT-11 on 23rd May, 2023, as well. Subsequently, the impugned order seems to have been passed on 26th April, 2024.
Thus, considering the fact that no reply has been filed and personal hearings have not been availed by the Petitioner in respect of the impugned SCN, this Court is of the opinion that the Petitioner ought to be provided another opportunity to be heard on merits.
Accordingly, the impugned order is set aside and the matter is relegated to the Adjudicating Authority to be heard on merits.
All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to file a reply and enable access to the notices and related documents.
It is again made clear that the issue in respect of the validity of the impugned notifications is left open and the order of the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’. [2025 (4) TMI 60 - SC ORDER].
The petition is disposed of in the above terms.
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2025 (5) TMI 1192
Extension of time limits for adjudication of show cause notices - validity of Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification - non-service of the Show Cause Notice - suspension of GST registration - Challenging the SCN and impugned order - HELD THAT:- A perusal of the above Show Cause Notice makes it clear that the Petitioner’s GST Portal remained suspended from 24th July, 2023. It is further noticed that the Petitioner has not filed a reply to the Show Cause Notice dated 29th May, 2024 from which the impugned order arises. The personal hearing, even though granted on 23rd August, 2024, has not been availed by the Petitioner. Considering the above position and the fact that the opportunity to file the reply or attend personal hearings has not been availed of, this Court is of the opinion that the Petitioner ought to be provided another opportunity to be heard on merits.
Accordingly, the impugned order is set aside and the matter is relegated to the Adjudicating Authority to be heard on merits. The Petitioner is permitted to file a reply by 10th July, 2025. Upon such reply being filed, the Adjudicating Authority shall provide a personal hearing to the Petitioner, and the notice for the same shall be sent to the following email address and Phone number.
All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to enable access to the notices and related documents.
It is again made clear that the issue in respect of the validity of the impugned notifications is left open and the order of the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’ and this Court in Engineers India Limited v. Union of India & Ors. [2025 (4) TMI 60 - SC ORDER].
The petition is disposed of in the above terms.
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2025 (5) TMI 1191
Extension of time limits for adjudication of show cause notices - Validity and legality of the Notification No. 9/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notification -clerical error in GSTR-09 - rectification application - Challenging the SCN and impugned order - HELD THAT:-Considering the fact that Petitioner’s replies has not been duly considered and no personal hearing is seen to have been provided, the Court is of the opinion that the impugned order deserves to be set aside.
Ordered accordingly. The matter is remanded to the concerned Adjudicating Authority for the Petitioner to be heard on merits.
All rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be provided to the Petitioner to enable filing of the reply as also access to the notices and related documents.
However, it is again made clear that the issue in respect of the validity of the impugned notifications is left open and the order of the adjudicating authority shall be subject to the outcome of the decision of the Supreme Court in ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’.[2025 (4) TMI 60 - SC ORDER].
Petition is disposed on the above terms.
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2025 (5) TMI 1190
Extension of time limit of issuance of SCN u/s 73 / 74 - Validity of the Central and State Tax Notifications Nos. 9/2023 and 56/2023 - procedural requirements under Section 168A for prior to the issuance of notifications - No opportunity to file a reply to the SCN - principles of natural justice - Challenging the SCN and impugned order - HELD THAT:- This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
Accordingly, the impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to the SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the SCN shall be passed accordingly.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in Engineers India Limited v. Union of India &Ors.[2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of in above terms.
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2025 (5) TMI 1189
Extension of time limit of issuance of SCN u/s 73 / 74 - Validity of Notification No. 9/2023-Central Tax, Notification No. 56/2023-Central Tax as also the Notification No. 09/2023-State Tax and Notification No. 56/2023-State Tax - procedural requirements under Section 168A for prior to the issuance of notifications - violation of the principles of natural justice - No opportunity to file a reply to the SCN - Challenging the SCN and impugned order - HELD THAT:- This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
Accordingly, the impugned order is set aside. The Petitioner is granted time till 10th July 2025, to file the reply to SCN. Upon filing of the reply, the Adjudicating Authority shall issue a notice for personal hearing to the Petitioner.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the SCN shall be passed accordingly.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in Engineers India Limited v. Union of India & Ors. [2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of in above terms.
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2025 (5) TMI 1188
Extension of time limits for adjudication under the GST regime - Validity of Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax - procedural requirements under Section 168A for prior to the issuance of notifications - No opportunity to be heard - No knowledge of the issuance of the SCN - cancellation of the registration retrospectively - no access to their GST Portal - Challenging the SCN and impugned order - HELD THAT:- Since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
Accordingly, the impugned order is set aside.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and a fresh order with respect to the SCN shall be passed accordingly.
However, it is made clear that the issue in respect of the validity of the impugned notification is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.[2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of.
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2025 (5) TMI 1187
Extension of time limit of issuance of SCN u/s 73 / 74 - Validity of Notification No. 9/2023-Central Tax, Notification No. 56/2023-Central Tax as also the Notification No. 09/2023-State Tax and Notification No. 56/2023-State Tax - procedural requirements under Section 168A for prior to the issuance of notifications - No opportunity to file a reply to the SCN - violation of the principles of natural justice - Challenging the SCN and impugned order - HELD THAT:- This Court is of the opinion that since the Petitioner has not been afforded an opportunity to be heard and the said SCN and the consequent impugned order have been passed without hearing the Petitioner, an opportunity ought to be afforded to the Petitioner to contest the matter on merits.
Accordingly, the impugned order is set aside.
The reply filed by the Petitioner to the SCN along with the submissions made in the personal hearing proceedings shall be duly considered by the Adjudicating Authority and fresh order with respect to the SCN shall be passed accordingly.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open. Any order passed by the Adjudicating Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors. and of this Court in Engineers India Limited v. Union of India &Ors.[2025 (4) TMI 60 - SC ORDER].
All rights and remedies of the parties are left open. Access to the GST Portal, shall be provided to the Petitioner to enable uploading of the reply as also access to the notices and related documents.
The present writ petition is disposed of in above terms.
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2025 (5) TMI 1186
Extension of time limit of issuance of SCN u/s 73 / 74 - Form GST DRC-07 - Validity of Notification 56/2023 (Central Tax) and Notification 09/2023 (Central Tax) - procedural requirements under Section 168A for prior to the issuance of notifications - registration cancelled as the firm was non-existent - Challenging the SCN and impugned order - HELD THAT:- A perusal of the record reveals that the order has considered the reply and noted that the supplier’s registration itself was cancelled as the firm was non-existent. Considering the fact that the reply has been considered, a personal hearing was granted and the impugned order is an appealable order under Section 107 of Central Goods and Services Tax Act, 2017(‘CGST Act’), the Court is of the opinion that the order does not warrant interference under the writ jurisdiction.
Accordingly, the Petitioner is permitted to file an appeal under Section 107 of the CGST Act along with the prescribed pre-deposit by 10th July, 2025. Considering the present petition has been pending before this Court, if the appeal is filed within the stipulated time, the Appellate Authority shall not dismiss the appeal on limitation and shall hear the Petitioner on merits.
All the rights and remedies of the parties are left open. Access to the GST Portal, if not already available, shall be ensured to be provided to the Petitioner to enable filing of reply as also access to the notices and related documents.
However, it is made clear that the issue in respect of the validity of the impugned notifications is left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court in ‘M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors’.[2025 (4) TMI 60 - SC ORDER].
Petition is disposed of in the above terms.
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2025 (5) TMI 1185
Extension of time limit of issuance of SCN u/s 73 / 74 - Demand for GST along with penalties - non-payment of outward GST liability on sale/supply of salvage/wreck claims in claims settled by the insurance companies - Challenged the impugned order - HELD THAT:- Mr. Tarun Gulati, ld. Sr. Counsel for the Petitioner, relies upon the circular dated 26th January, 2024 issued by Central Board of Indirect Taxes and Customs (‘CBIC’). Ld. Sr. Counsel also submits that there are two other glaring issues in this case. Firstly, that the summary orders uploaded by the Respondent No. 4/Department have erroneously converted the demand to Rs. 144 crores instead of Rs. 7.21 crores. Secondly, it is submitted that the demand relates to 20 States and there is also a State GST component in each of the States.
The impugned orders prescribe that a common appeal can be filed in respect of the entire demand. However, there is no clarity as to how in respect of the GST of 20 states, a common appellate authority can adjudicate the issue. On both these issues, let Mr. Akshay Amritanshu, ld. Senior Standing Counsel for Respondent-CBIC, seek instructions.
Since the demand itself has been erroneously uploaded, no coercive steps shall be taken against the Petitioner till the next date. If any rectification orders have to be passed by the Departments concerned, they may do so by the next date of hearing.
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2025 (5) TMI 1184
Rejection of refund of recovered amount during the pendency of the appeal - HELD THAT:- Provision of the Income Tax Act and Rules framed thereunder for the petitioner to approach the AO grant of refund of recovered amount during the pendency of appeal after the petitioner came out successful in the appeal. Therefore, this Court accedes to the submission at the Bar that upon disposal of appeal, the demand raised in the assessment order dated 29.03.2022 passed u/s 147 of the I.T. Act being set aside, it is obligatory on the part of the authority concerned to refund the amount to the petitioner.
Therefore, this Court accepting writ petition of the petitioner-Society, directs the opposite parties to refund the amount recovered towards discharge of demand as raised in the aforesaid reassessment order within a period of seven days hence, failing which the amount so withheld, shall carry interest at the rate of 6% per annum from the date of recovery till the date of actual restoration/refund.
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2025 (5) TMI 1183
Penalty u/s 271 (1) (c) - disallowance of revenue expenditure - AO allowed twenty-five percent of the said expenditure as depreciation allowance and made an addition of the balance seventy-five percent of the said amount - Respondent/Assessee had wilfully attempted to reduce his income and, therefore, it was a fit case for imposition of penalty - HELD THAT:- We find no infirmity with the decision of the CIT(A) holding that the question involved was a debatable one and, therefore, a penalty u/s 271 (1) (c) could not be imposed.
ITAT did not express any opinion as to the CIT(A)’s view; it rejected the Revenue’s appeal solely on the ground that the notice issued by the AO under Section 274 of the Act read with Section 271 of the Act did not specifically state as to under which limb of Section 271 (1) (c) of the Act, penalty proceedings were intended to be proceeded. Section 271 (1) (c) of the Act has two limbs: the first is where the allegation is that the assessee has concealed income; and the second is, that the assessee has furnished incorrect particulars of income.
This court has, in a number of decisions, held that the notice, which does not specifically indicate the particular limb of Section 271 (1) (c) that is sought to be invoked, would be invalid as being vague.
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2025 (5) TMI 1182
Reopening of assessment u/s 147 - period of limitation - HELD THAT:- As explained by the Supreme Court in the case of Union of India v. Rajeev Bansal[2024 (10) TMI 264 - SUPREME COURT (LB)] the period from the date of the issuance of the notice till 04.05.2022, the date on which the Supreme Court had rendered the decision in Union of India & Ors. v. Ashish Agarwa[2022 (5) TMI 240 - SUPREME COURT] is required to be excluded. Additionally, the time provided till the date of providing the material, which should have accompanied a notice under Section 148A (b) of the Act, as well as the time available to the assessee to respond to the said notice is also required to be excluded by virtue of the Fourth Proviso to Section 149 (1) of the Act, as applicable at the material time.
In the present case, the time period for issuance of notice under Section 148 of the Act expired on 16.06.2022. However, the impugned notice was issued on 20.07.2022, which is beyond the said period. Thus, the notice was beyond the period of limitation.
Concededly, the said controversy is covered in favour of the Assessee by the decision of this court in Ram Balram Buildhome Pvt. Ltd. [2025 (2) TMI 55 - DELHI HIGH COURT]
Decided in favour of assessee.
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2025 (5) TMI 1181
Delay of seven years and 104 days in one appeal and six years and 83 days in second case - HELD THAT:- Delay occurred in filing the appeal should be considered liberally, but at the same time, it is also settled law that there is no general proposition that mistake of counsel by itself is always a sufficient ground. Every case is required to be considered on the basis of facts and circumstances of the case.
In the case at hand, ITAT has considered the reasons offered by appellant caused in filing appeals belatedly, but due to lack of bonafides impugnable to parties seeking condonation of delay, reasons were not found sufficient and consequently, delay was not condoned.
ITAT has relied upon the judgment delivered in the matter of Manimandir Sewa Nyas Samiti Ramgarh Ayodhya [2020 (6) TMI 109 - SC ORDER] wherein the Supreme Court has held that it was otherwise the duty of the assessee to watch the affairs of its firm and delay of few days or months can be considered, but delay of years is required to be examined minutely. ITAT has held that there was gross negligence attitude of the assessee and assessee was aware of the orders passed by CIT (A) even though assessee has not excercised any care to enquire about status of second appeal and tried to shift the responsibility towards his lawyer. The assessee was negligent and his act was lethargic. The findings recorded by ITAT appears to be just and proper. We do not find any infirmity in the finding recorded by ITAT in the impugned order.
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2025 (5) TMI 1180
Nature of expenditure - expenditure incurred in respect of lease hold property - revenue expenditure or capital expenditure - HELD THAT:- We have no doubt that the incurrence of the expenses at serial numbers 1 to 9 are necessary in order to render the building functional for the purposes of the assessee’s business. Their recurring nature is also not in doubt insofar as Carpentry, electrical work, painting, false ceiling, repair and maintenance of the walls, pest control, installation of camera and execution of annual maintenance contracts, are works that are routinely carried out in business premises as and when required, to keep the premises in proper shape for the conduct of business.
As far as Item No.10 is concerned, parties concur on the position that they are only miscellaneous expenses. The Tribunal has rejected the claim of the assessee opining that the ‘simultaneous incurrence’ of the expenditure would result in re-construction of the old building.
The tribunal thus goes on to adopt the cumulative impact of the repair and maintenance work as the relevant parameter, which, in our view, would not be a proper approach. The question of re-construction does not arise and in fact, it is nobody’s case that the building has been re- constructed. The rental agreement clearly states that there would be no structural modification to the subject property.
Hence, the finding of the Tribunal to the effect that the individual repair/maintenance works would amount to re-construction of the old building, are, in our view, perverse and not borne out of the materials available on regard.
Though the Tribunal has not referred to Explanation (1) to Section 32(1)(ii) of the Act, the assessing officer has made reference to the Explanation and Mr. Narayanasamy has also drawn our attention to the same. In our considered view, Explanation does not, in any way, militate against the claim of the appellant and reliance upon the same by the Department does not advance its case in any way.
The purport of the Explanation is laudable and enables even a lessee of a building to seek grant of depreciation, despite the premises being leasehold in nature. However, the attempt of the revenue is to interpret Explanation (1) such that, when an assessee is deemed to be the of the leasehold premises, all expenses incurred by that assessee be taken to be capital in nature.
We do not agree with such an interpretation as it does not reflect the true purport of Explanation (1) and in fact, runs counter to its avowed intention. Further, there is nothing in the Explanation to lead one to such an interpretation. The Explanation is intended to enable a lessee in leasehold premises to claim depreciation on capital assets, despite his status as a lessee and not as owner. This would not stand in the way of the lessee claiming the expenditure as revenue, if the lessee is otherwise able to establish the nature of the expenditure incurred.
Assessee appeal allowed.
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9911796707
