TMI Blog2013 (7) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... horities and the order of the Tribunal was perverse and unsustainable - Court relied upon the judgement of CIT v/s ASSOCIATED CEMENT Cos. LTD. (1988 (5) TMI 2 - SUPREME Court) - the payment made by the appellant to the vendor which resulted in the acquisition of no asset or right would still be treated as revenue expenditure - Tribunal was erred in not allowing the amount paid by the appellant as revenue expenditure in the A.Y. 1997-98 - the Tribunal was not right in disallowing 1/15th of the payment for the relevant year as originally claimed by the appellant – appeal decided in favour of assesse. - ITA No.1357/2006 - - - Dated:- 4-9-2012 - K Sreedhar Rao And B Manohar, JJ. For the Appellant : Sri S Parthasarathi, Adv. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .50,000/-towards benefit of license and permission. Further, as per Clause 3 of the Supplementary agreement, the purchaser was allowed to use the name of Ceaser's Restaurant for a period of 12 months or such other period as mutually agreed between the parties. 3. The assessee submitted the returns of income for the assessment years 1997-98 and 1998-99. In the returns, Rs.55,00,000/- was paid towards unexpired tenancy right as revenue expenditure and write off 1/15th of expenditure every year. The assessment was taken up for scrutiny for issuance of notice under Section 143(2) and 142(1) of the Act. The authorised representative appeared and produced the records. He has contended that as per the supplementary agreement dated 11-3-1996, Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, raised by the appellate dismissed the appeal extracting the order passed by the Appellate Authority by its order dated 27-04-2006. Being aggrieved by the said order, the appellant has preferred this appeal. 5. Sri. S. Parthasarathi, learned counsel appearing for the appellant contended that the order passed by the Appellant Tribunal is contrary to law. The appellant has purchased the running business from Mr. Lawrence D'Souza. The Vendor is not the owner, he is only the lessee of the building. The Vendor has agreed to surrender the unexpired period of lease and the appellant was at liberty to execute the fresh agreement with the original owner of the premises. Accordingly, the appellant has executed a lease agreement with the original ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the appellant is not entitled for any deductions. Hence, sought for dismissal of the appeal. 7. The appeal was admitted to consider the following substantial question of law: (i) Whether the Tribunal was justified in ignoring the submissions of the appellant while upholding the orders of the lower authorities and whether the order of the Tribunal was perverse and unsustainable? (ii) Whether the payment of Rs.55 lakhs made by the appellant to the vendor which resulted in the acquisition of no asset or right would still be a capital expenditure? (iii) Whether the Tribunal was erred in not allowing the entire Rs.55 lakhs paid by the appellant as revenue expenditure in the assessment year 1997-98? (iv) In the alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Authority as well as the Appellate Tribunal confirmed the said order. The records disclose that the expenditure incurred for getting the said restaurant is revenue expenditure and it cannot be treated as capital expenditure. The appellant has purchased running Hotel business from Mr.Lawrence D'Souza As per the terms of agreement, it is the responsibility of the Vendor to secure the transfer of lease of the premises in favour of the purchaser. Further, the Vendor has to negotiate on behalf of the purchaser with the owner for transfer of unexpired lease period in favour of the purchaser and also extension of the lease subject to payment of enhanced rent and deposit. The Hon'ble Supreme Court in a judgment reported in (1998) 172 ITR 257 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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