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TMI Blog2015 (2) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... of storage shed on the lease-hold land and claimed the same as expenditure in Profit & Loss A/c. During the course of assessment proceedings, the Assessing Officer held that the sheds were constructed on lease-hold land, therefore, the case of assessee falls within the ambit of Explanation-1 to Section 32(1) of the Income Tax Act, 1961 (herein after referred to as 'the Act'). The amount spent by the assessee on construction of sheds is capital expenditure allowable for depreciation and is not a revenue expenditure. Against the assessment order dated 30-11-2011, the assessee preferred an appeal before the CIT(Appeals). The CIT(Appeals) vide impugned order upheld the findings of the Assessing Officer and dismissed the appeal. Aggrieved by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. Ltd., reported as 124 ITR I (SC) and the decision of Hon'ble Madras High Court in the case of CIT Vs. TVS Lean Logistics Ltd., reported as 293 ITR 432 (Madras). 4. On the other hand, Shri Guru Bhashyam, representing the Revenue vehemently defended the order of CIT(Appeals). The ld.DR submitted that the assessee has placed reliance on the decision of Hon'ble Supreme Court of India in the case of CIT Vs. Madras Auto Service (P) Ltd. reported as 233 ITR 468. The said decision is prior to insertion of Explantion-1 to Section 32(1) in the year 1986. There has been substantial shift in treatment of expenditure incurred on leased premises after insertion of Explanation-1. The ld.DR in order to support his submission relied on the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on the construction of any structure or doing of any work, in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee". Explanation-1 to Section 32(1) was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 w.e.f.01-04- 1998 to deal with the situation where the assessee is carrying on business or profession in a building on lease or other rights of occupancy. Any expenditure incurred by the assessee for the purpose of business or profession on the construction of any structure or renovation or extension or improvement to the building then the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same in a different manner, only because of harsh consequences arising therefrom ; and it is well known that the court can iron out the creases but it cannot change the texture of the fabric, cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous, cannot add or subtract words to a statute or read something into it which is not there and cannot rewrite or recast legislation, vide Nasiruddin v. Sita Ram Agarwal [2003] 2 SCC 577. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult the entire construction cost is admissible as the revenue expenditure." The Hon'ble Supreme Court of India in the case of CIT Vs. Madras Auto Service (P) Ltd. (supra) has observed that where the initial expenditure incurred results in saving of Revenue expenditure in the subsequent AYs, the said initial expenditure shall be considered as Revenue in nature. 6. A perusal of the records show that the assessee was allotted four yards for storage i.e., open space without shed. The assessee contributed for construction of sheds on the space provided by the Tamil Nadu Foodgrains Marketing Yard Ltd. Thus, there was no building or any structure in existence on the land in relation to which any renovation or extension or improvement or any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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