TMI Blog2011 (5) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... ess expenditure incurred in that year - Decided in favour of assessee. Expenditure on lease hold improvements - The Assessing Officer took the view that the lease improvements were on account of renovation carried out in the lease premises and, therefore, had to be capitalised - Held that:- As when in the earlier year also, the assessee had capitalised the same and claimed depreciation at 10 per cent. on it thus to be treated as capital expenditure and allowed depreciation at 10 per cent - This appeal is dismissed accordingly. - 10 of 2011 - - - Dated:- 10-5-2011 - SIKRI A. K., MEHTA M. L., JJ. JUDGMENT A. K. Sikri J.- 1. The respondent-assessee filed the return for the assessment year 1998-99 declaring loss at Rs. 70.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion of the Commissioner of Income-tax (Appeals), the entire expenditure deserved to be allowed as revenue expenditure. 3. The Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") confirmed the order passed by the Commissioner of Income-tax (Appeals) and allowed the entire claim made by the assessee of Rs. 4.18 crores towards advertisement and sales promotion as revenue expenditure holding that the finding recorded by the Commissioner of Income-tax (Appeals) had not been controverted by the Revenue. The Tribunal observed that no part of expenditure had been identified by the Assessing Officer as capital in nature and, therefore, the entire claim made by the assessee has to be allowed. 4. Challenging this order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncing was normally more than one year. On this premise, the Assessing Officer took the view that these expenses could not be termed as having the chargeability in which they were incurred. He took average of three years for such agreements and spread the expense over a period of three years thereby allowing one-third expenditure incurred in that particular year. The matter was taken up in appeal and before the Commissioner of Income-tax (Appeals), the assessee questioned the aforesaid approach of the Assessing Officer by contending that in the course of its business, the assessee enters in the loan agreements of hire purchase which agreements are required to be stamped in accordance with the provisions of Indian Stamp Act. The stamp duty pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g agents, for their services in sourcing hire in the year in which the loan is disbursed, it is to be allowed as business expenditure. The Tribunal, to arrive at this finding took into consideration the clauses of the agreement relating to the mode of payment of consideration as well as 'termination' clause in the agreement. Thus, as the entire expenditure was incurred which admittedly have a nexus with the business of the assessee, it was treated as business expenditure allowable under section 37 of the Act. The Tribunal also relied upon the judgment of the Supreme Court in the cases of Calcutta Co. Ltd. v. CIT [1959] 37 ITR 1 (SC), CIT v. Associated Cement Companies Ltd. [1988] 172 ITR 257 (SC), Empire Jute Co. Ltd. v. CIT [1980] 124 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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