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2024 (1) TMI 212 - ITAT CHENNAINature of expenses - land registration charges - revenue or capital expenditure - HELD THAT:- It is our considered opinion that the registration charges incurred by the assessee while executing the agreements for taking business premises on rent are revenue expenditure. Because, lease is not a permanent transfer of immovable property. It is for a specific period only and terminable as per terms and conditions of the agreement even before the expiry of the period of the lease by both the parties. Secondly, the assessee has incurred that registration expenses in connection of his business. Assessee needed premises in order to carrying on the business in various places and accordingly, the assessee taken property on rent. The period of the agreement perhaps is more than one year and attracted the compulsory registration of the agreement. The assessee cannot enjoy that property forever under a rent agreement/lease. The assessee may have to vacate that property before efflux of time depending on the business conditions of that particular place. Therefore, we are of the view that the lower authorities erred in treating the registration fees incurred by the assessee as capital expenditure. Accordingly, we decide this issue in favour of the assessee. Payment of service tax - CIT(A) has directed the Ld. AO to verify the claim and allow if found proper. Therefore, the Ld. AO shall comply the direction given by the Ld. CIT(A). Disallowance u/s 14A - AO during the assessment proceeding, CIT(A) confirmed this addition by observing that no submission was made by the assessee to substantiate his claim - HELD THAT:- We observe that the assessee failed to participate in the 1st appellate proceedings before the Ld. CIT(A) and therefore, the Ld. CIT(A) disposed of the appeal ex-parte. Secondly, the Ld. AR sought remand of the matter and the Ld. DR also has no objection for remanding of the issue. Accordingly, we set aside the order of the Ld. CIT(A) to the extent of the issue of disallowance u/s 14A of the Act and remand this issue to the Ld. CIT(A) for fresh consideration. It is needless to add here that the Ld. CIT(A) shall provide a reasonable opportunity to the assessee to substantiate his claim on the issue and thereafter dispose of the matter. We, at the same time direct the assessee to substantiate his claim before the Ld. CIT(A) accordingly.
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