TMI Blog2014 (1) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... o and DVD players, these expenses also need to be tested in the light of the fact that these expenditures have been made by the assessee to maintain harmony and efficiency in the service of guest. The additions made are revenue in nature because these expenditures are not bringing any enduring benefit or enhancement of earning capacity of the assessee- The authorities below ignored a basic fact that the assessee is operating Five Star Hotel and it is bound to maintain good ambience and dignity of the hotel and to enable to the system which could provide efficiency and hassle free services to the guests of the hotel – thus, the expenses are revenue in nature – Decided in favour of Assessee. Disallowance on account of donation made – De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled first appeal before the Commissioner of Income Tax(A) which was partly allowed granting some relief to the assessee but the Commissioner of Income Tax(A) confirmed the disallowance of Rs.22,56,239/- pertaining to automation system (doors), provision made for Hyperion Software, expenses on Milnor/Washer Extractor, installation of Milnor, Mobile radio and DVD Players. The Commissioner of Income Tax(A) also confirmed the disallowance on account of donation of Rs.15,000 made by the assessee during the year under consideration. Now, the assessee is again before this Tribunal in the second appeal with the grounds as mentioned hereinabove. Ground no.1 4. Apropos ground no.1, ld. counsel of the assessee submitted that the assessee is opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng any benefit of enduring nature to the assessee and these expenses have been made to maintain the efficiency of the system and these expenses do not increase the capacity of the hotel. Finally, the ld. counsel of the assessee submitted that the authorities below ought to have considered the necessity of a Five Star Hotel while determining the nature of expenditure made on regular maintenance of the hotel. 5. In addition to above, ld. counsel submitted that the conversion of hard court to clay tennis court was a need based expenditure which does not enhance the capacity of the hotel in any manner and in the same way, expenses on artificial grass and Dholpur Planter for Banquet halls was also made for replacement of old abandoned and brok ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f record, at the outset, we observe that admittedly, the assessee company is operating Five Star Hotels in Delhi, Mumbai and Kolkata which needs regular maintenance of ambience and basic infrastructure to provide star facilities and service to the guests. Coming to the issue of disallowance made by the authorities below, we observe that the provisions made by the assessee for Hyperion software and I Cap software has been reversed by the assessee in the subsequent financial year and the effect has become nil in this regard. 8. As far as expenses pertaining to Tennis hard court to tennis Clay Court, Dholpur planter for banquets are concerned, these are not brining any enduring benefit or enhancement of capacity of hotel in any manner. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below ignored a basic fact that the assessee is operating Five Star Hotel and it is bound to maintain good ambience and dignity of the hotel and to enable to the system which could provide efficiency and hassle free services to the guests of the hotel. Accordingly, we hold that the impugned additions made by the Assessing Officer and confirmed by the Commissioner of Income Tax(A) are revenue in nature and the Assessing Officer is directed to grant relief to the assessee in this regard. 11. Ground no.1 of the assessee is allowed as indicated above. 12. Apropos ground no.2, from the impugned order, we observe that the Commissioner of Income Tax(A) has confirmed the addition with the following observations:- "5. Ground No.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of above submissions, we observe that in reply to our specific query, counsel for the assessee fairly conceded that no documentary evidence was produced before the authorities below to substantiate the claim u/s 80G of the Act pertaining to donation of Rs.15000 made by the assessee. In this situation, we are unable to see any infirmity, ambiguity or perversity in the impugned order and we have no valid reason to interfere with the same. Accordingly, ground no. 2 of the assessee being devoid of merits is dismissed. 16. Ground no. 4 is general in nature which needs no adjudication and we dismiss the same. 17. Ground no.3 is related to consequential relief in interest u/s 234A, 234B and 234C. Since we have allowed ground no.1 by direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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