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2016 (6) TMI 486 - ITAT KOLKATA

2016 (6) TMI 486 - ITAT KOLKATA - TMI - Expenditure incurred and debited in the P & L account under the head ’repairs & maintenance’ - capital expenditure or revenue expenditure - Held that:- When expenditure incurred for an advantage for the enduring benefit of trade can be attributable to capital expenditure in nature. In the present case also the assessee incurred expenditure for its three locations to the extent of ₹ 1,00,50,077/- under the head repairs and maintenance and the said exp .....

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/2013 - Dated:- 31-5-2016 - Shri P. M. Jagtap Accountant Member And Shri S. S. Viswanethra Ravi Judicial Member For the Appellant : Shri Abhijit Biswas & Dr. Samir Chakraborty, Advocates,Ld.ARs For the Respondent : Shri Sital Chandra Das, JCIT, Ld. Sr.DR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the assessee is arising out of the order of the CIT(A),XII, Kolkata in Appeal No. 493/XII/Cir-10/08-09 dated 21-01-2013 against the order of assessment framed u/s. 143(3) of the Income Tax .....

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on fixed assets/premises and expenses are incurred to facilitate the business of the Appellant. 3. The Appellant therefore prays that the expenses be treated as revenue in nature and be allowed as deduction. GROUND-II The Appellant craves leave to add, amend, and/or alter the above ground of appeal at the time of hearing. 3. Brief facts of the case are that the assessee is a company engaged in trading and servicing of vacuum cleaners, water filter cum purifiers, electronic air cleaning system, .....

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s situated in three locations, Cochin, Lucknow and Kolkata. Further, the said expenditure was incurred under the invoices raised by M/s. Deva Interiors. The view of the AO was that such expenditure is capital in nature for the reason that the said expenditure has created new asset on existing structure as extension which rendered advantage to the assessee s business. The AO treating the same as capital in nature added to the income of assessee. 4. In 1st appeal the assessee contended before the .....

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above, the CIT-A opined, that the expenditure incurred towards renovation of office premises is capital in nature as it increased the value of asset and confirmed the order of the AO. 5. Aggrieved, the assessee is in appeal before us by raising respective grounds of appeal, which have been mentioned herein above. 6. During the course of hearing before us the Ld. Counsel for the assessee submitted that all the expenditure debited to Profit & Loss account was incurred for repairs and maintena .....

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d quash the order of CIT-A as he erred in not allowing the claim of ₹ 1,00,50,077/- as he treated the same as capital expenditure. 7. In reply, the Ld. DR submitted that the assessee purchased a huge volume of goods for the first time for its business and it has to be treated as capital expenditure. Further argued that the action of the AO and confirming the same by the CIT-A treating the same as capital expenditure is justified. He relied on the orders of the revenue authorities below. 8. .....

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that the assessee carried out intensive interior work & electrical work to its existing offices at three locations. On perusal of the invoices and final bill issued for the purpose of inclusive interior and allied works for its Kolkata office. Copy of the same are available pages 1-10 of the paper book. Description therein shows that the works were for fixing 12mm thick glazed partition, cabin flush doors, finished with lamination, fixing low height, full height and overhead fitting storage .....

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ce for the purpose of interior work and electrical works. Pages 43-48 of the paper book. The contention of the assessee is that though it had incurred expenditure for providing interior works, but it did not create any new asset by way of any renovation/interior works. It only incurred expenditure towards repairing & maintenance for its existing offices. However, the description as shown at pages 1-48, the expenditure incurred created a new asset. The contention of the assessee was that it o .....

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he case of Indian Ginning & Pressing Co. Ltd Vs. CIT reported in 252 ITR 577(Guj) and also in the case of CIT Vs. Dr.A.M Singhvi reported in 212 CTR 1(Raj), it is observed that the facts therein are distinguishable from the facts of the case on hand. We are conscious of the observation made by the Hon ble Supreme Court in the case of Empire Jute Co Ltd vs CIT that every case has to be decided on facts keeping in mind that broad picture of whole expenditure incurred. In the present case, it i .....

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he Hon ble Supreme Court in the case of Empire Jute Co. Ltd Vs. CIT reported in 124 ITR I(SC) and relevant portion of finding at para-8 is reproduced herein below for the sake of clarity:- 8. The decided cases have, from time to time, evolved various tests for distinguishing between capital and revenue expenditure but no test is paramount or conclusive. There is no all embracing formula which can provide a ready solution to the problem; no touchstone has been devised. Every case has to be decide .....

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