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2022 (9) TMI 54 - HC - Income TaxNature of expenditure - expenditure incurred towards lease deed registration - revenue or capital expenditure - whether the Tribunal was justified in law in not directing the lower authorities to allow depreciation / amortization on the expenditure treated by them as a capital expenditure? - HELD THAT:- There is no dispute with regard to the fact that monthly rent payable by any assessee is to be treated as revenue expenditure. Law requires that if the period is more than one year, the lease deed must be registered under Section 17B of the Registration Act, 1908. Further, based on the monthly rent and the security deposit, ad valorem stamp duty will have to be paid. Thus, the intention of the parties namely, lessor and lessee are clear that the lessee shall take premises by paying rents every month for a certain period. In the case of PLANTATION CORPORATION [1993 (6) TMI 46 - KERALA HIGH COURT] following the decision of Bombay High Court in CINCIETA PVT. LTD. [1982 (2) TMI 58 - BOMBAY HIGH COURT] has recorded that the Allahabad, Calcutta and Karnataka High Courts, while rendering the decisions in United Commercial Corporation V. CIT [1970 (8) TMI 10 - ALLAHABAD HIGH COURT], Gobind Sugar Mills Ltd. [1978 (8) TMI 65 - CALCUTTA HIGH COURT] and Hotel Rajmahal [1984 (3) TMI 24 - KARNATAKA HIGH COURT] did not have the advantage of the liberal and pragmatic approach made by the Supreme Court in three decisions which we have referred to above and held that the stamp duty and registration charges as revenue expenditure. Thus question of law raised by the assessee is answered in favour of the assessee by holding that the expenditure made towards stamp duty and registration charges as revenue expenditure and against the revenue.
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