Contact us   Feedback   Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (3) TMI 1120 - ITAT CHENNAI

2015 (3) TMI 1120 - ITAT CHENNAI - TMI - Depreciation towards temporary structures in leased premises - CIT(A) restricted claim to 10% as against 100% claimed by the assessee - Held that:- The assessee has incurred an expenditure towards refurbishing the leased out premises by incurring expenditure on wooden partitions, false ceiling, ESD tiled floorings, electrical network cabling and interior decoration etc. There is no doubt that the assessee would derive benefit from these structures year af .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enefit from these structures at least for a period of nine years or even more. These structures also remains as the property of the assessee and on vacating the premises, the assessee is entitled to either remove these structures, or sell it to the new tenant. As pointed out by the Ld. CIT (A), Explanation-1 to Section 32 clearly clarifies the issue, though it has been inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 01.04.1988.

In the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

facts of the present case before us. - Decided against assessee - I.T.A.No.1369/Mds. /2014 - Dated:- 18-3-2015 - SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER Appellant by : Mr.R.Vijayaraghavan,Advocate Respondent by : Mr.P.Radhakrishnan,JCIT D.R ORDER PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: This appeal is filed by the Assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-I, Chennai, dated 24.03.2014 in ITA No.381/2010-11/A-1 passed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd trading of telecommunication products, filed its return of income for the assessment year 2008-09 on 25.09.2008 admitting its income as 3,35,31,354/-. Subsequently the case was selected for scrutiny under CASS and assessment was completed U/s. 143(3) of the Act on 14.02.2010 wherein the Ld. Assessing Officer made certain disallowance amongst which one of the disallowance was the excess claim of depreciation on furniture and fittings such as temporary structures like wooden partitions, false c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d also placed reliance in the following cases while arriving at his decision. i) New Shorrock Spinning & Manufacturing Co. Ltd Vs. CIT (1956) 30 ITR 338 (ii) Ld. CIT Vs. Madras Auto Services Pvt Ltd., in (1998)233 ITR 468 (SC) 4. On appeal before the Ld. CIT (A), Ld. CIT (A) confirmed the order of the ld. Assessing Officer and dismissed the appeal of the assessee by observing as under:- 4.2. I have considered the rival submissions and the case laws relied on by them. The Assessing Officer ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, any 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 works is a bui .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e ceilings were considered as capital assets. 4.2.1. Further, while dealing with the improvements on leasehold building, we have to keep the following points in mind. (i) to see whether the said expenditure is on a capital asset which is eligible for claiming depreciation. (ii) for the purpose of depreciation whether it is a leasehold building or own building, they are equally eligible for depreciation. It cannot be mistaken that the expenditure incurred is revenue because it is a leasehold buil .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the purpose of current repairs or the main purpose behind is to get a new advantage out of the above expenses by means of improving the leased premises. If it is to get a new advantage then it is capital in nature as per the Supreme Court s decision in the case of Saravana Spinning Mills, 293 ITR 201. (v) to see whether the expenditure is of very temporary in nature eligible for 100% depreciation,. A temporary structure means it will be dismantled within the same year or the next year. Te ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

remises will partake the character of revenue expenditure. The expenditure incurred by the appellant is definitely for improving the leased premises, making it fit for carrying out its business. Further the improvements carried out by the appellant on the leased premises are not meant for dismantling in the same year or in the next year. In view of the above, the decisions relied on by the Assessing Officer are quite appropriate and the Assessing Officer is justified in disallowing the same as c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, affixed in leased premises would amount to revenue expenditure and is not in the nature of capital expenditure. Further, the Ld. A.R argued strongly by relying in the decision of the case Thiru Arooran Sugars Ltd. Vs. CIT reported in 350 ITR 324 (Mad.). The Ld. D.R argued in support of the orders of the Revenue. 6. We have heard both the parties and carefully perused the materials available on record and decisions cited by both the parties. It is apparent from the facts of the case that the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version