TMI Blog2011 (1) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenditure on the repairs and maintenance in the form of electrical fittings, electrification, cabinet, work station, partition, cupboard, stand etc. are liable to be treated as a revenue expenditure – Order of the CIT(A) reversed – also the depreciation as allowed by the Assessing Officer on the said expenditure which has been capitalized would stand reversed – Decided in favour of Assessee. Enhancement of disallowance made u/s 14A of the Act r.w Rule 8D of the Rule – Held that:- The decision in GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [ 2010 (8) TMI 77 - BOMBAY HIGH COURT] followed - no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to such incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent : Shri P. B. Sekaran ORDER Per George Mathan, Judicial Member : ITA No. 518/Mds/2010 is an appeal filed by the assessee and ITA No. 710/Mds/2010 is an appeal filed by the Revenue against the order of the learned CIT(Appeals), LTU, Chennai in ITA No./ 52/08-09/LTU(A) dated 24-02-2010 for the assessment year 2006-07. ITA No. 519/Mds/2010 is an appeal filed by the assessee against the order of the learned CIT(A), LTU in FBT No. 02/08- 09/LTU(A) dated 12-02-2010 for the assessment year 2006-07. 2. Shri R. Vijayaraghavan, Advocate represented on behalf of the assessee and Shri P.B. Sekaran, learned CIT-DR represented on behalf of the Revenue. 3. ITA 518/Mds/2010: In the assessee s appeal in regard to grounds No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly given a finding that the renovation or the improvement must be to the building. It was the submission that as the expenditures as had been incurred by the assessee were in the nature of temporary partition and temporary fixtures, the same were in the nature of furniture and fittings which are liable to be treated as revenue expenditure. 4. In reply, the learned DR vehemently supported the order of the learned CIT(A). It was the submission that in view of the provisions of section 32(1) and the Explanation 1 thereto, the expenditure as incurred by the assessee was liable to be held as a capital expenditure on which depreciation had also been allowed by the Assessing Officer. 5. We have considered the rival submissions. A perusal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying the provisions of Rule 8D. It was submitted by the learned authorised representative that the Assessing Officer had disallowed 2% of the dividend earned as disallowable u/s. 14A. It was the submission that the learned CIT(A) had enhanced the same without giving any enhancement notice and had applied the decision of the Special Bench of the I.T.A.T. in the case of Daga Capital Management (P) Ltd. in ITA No. 8057/Mumbai/3 dated 20.10.2008 and had directed that Rule 8D was to be applied. However, he fairly agreed that no ground has been raised in regard to the enhancement by the learned CIT(A) without giving a show cause notice. It was further fairly agreed by both sides that the issue in regard to the disallowance by applying the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee Rajendra Mills Ltd. v. Deputy Commissioner of Income-tax, reported in 63 TTJ 697, the prior period expenses were liable to be included for the purpose of computing the book profit under section 115JB. 10. In reply the learned DR submitted that the decision of the ITAT, Madras Bench in the case of Sree Rajendra Mills Ltd. was no more good law in view of the decision of the Hon'ble Supreme Court in the case of Apollo Tyres Ltd. v. CIT reported in 255 ITR 273 as also the decision of the Delhi High Court in the case of CIT v. Khaitan Chemicals And Fertilizers Ltd. reported in 307 ITR 150. It was the submission that the learned CIT(A) had considered these two decisions while granting the relief to the assessee. 11. We have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of appointment of the concerned employees as also to the cost to company statement as also to the Form 12BA statement as prescribed in Rule 26A(2) which show the particulars of the perquisites, fringe benefits or amenities and profits in view of salary with the value thereof which showed that the LTA was treated as a perquisite and TDS had been deducted thereon. He further drew our attention to Circular No. 8/2005 issued by the CBDT which gave clarification on various matters of Fringe Benefit Tax more specifically question No. 44 which was extracted by the learned CIT(A) in page 2 para 4 of his order. It was the submission that as per the said circular as the LTA had been treated as salary, Fringe Benefit Tax was not applicable to the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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