TMI Blog2011 (11) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... or preservation of an asset or was it expended otherwise. - In view of the decision in CIT Vs. Hi Line Pens Pvt. Ltd (2008 -TMI - 30864 - HIGH COURT DELHI) expenditure incurred improvement of leasehold premises allowed. - ITA Nos. 1344/2009 and 1363/2009 - - - Dated:- 4-11-2011 - RAJIV SHAKDHER, J. For the Appellant: Mr. Abhishek Maratha and MsAnshul Sharmaa, Advocates. For the Respondent: Mr. M.S.Syali, SrAvocate with Ms.Mahua Kalra, Ms.Husnal Syali and Mr.Rahul Sateeja, Advoctes. 1. The captioned appeals pertain to the years 2001-2002 and 2002-2003. The said appeals involve two issues: The first issue being: the treatment to be accorded to expenditure incurred by the assessee on purchase of software applications. These a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on flooring, partition, wiring, false ceiling, roofing, air-conditioning unit and duct, electric wiring, laying network for setting up computers and, on purchase of furniture. Both the Assessing Officer and CIT(A) disallowed the expenses on the ground that they were incurred on capital account. Recourse was taken to the provisions of explanation 1 to Section 32 of the I.T.Act, 1961 (in short I.T.Act) 3. In respect of both issues, the assessee filed an appeal with the Income Tax Appellate Tribunal (in short the Tribunal), while the revenue was in appeal before the Tribunal on the aspect of the enhancement of rate of depreciation by the CIT(A). 4. The Tribunal allowed the appeal of the assessee and restored the matter to the file o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether the expenses incurred on improvement of leasehold premises, were in the nature of revenue expenditure, as contended by the assessee. The court sustained the contention of the assessee and allowed the deduction claimed under Section 37(1) of the I. T. Act. The court noticed the dicta of the judgments of the Bombay High Court in the case of CIT vs David Mills Ltd. (Income Tax Reference No. 17/1950 decided by Chagla C.J. and Tendolkar, J. on 10.10.1950) and Mevor Mills ltd. vs CIT (Income Tax Reference No. 36/1950 decided by the same Bench, on 30.03.1951) wherein, it has been observed that in ascertaining whether an expenditure incurred is made on revenue account or otherwise one would have to bear in mind the nature of the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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