TMI Blog2016 (9) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld.CIT(A), we uphold the disallowance. Addition in respect of Repair and maintenance expenses - revenue or capital expenditure - depreciation availability - Held that:- The Hon’ble jurisdictional High Court in Bigjo’s India Ltd. vs. CIT (2007 (3) TMI 104 - HIGH COURT, DELHI ) considered almost a similar situation as is obtaining before us in the present appeal. In that case, the assessee, a licensee of the showroom, erected new counters and built a new lift shaft at a new site. It was held that such amount was not in the nature of current repairs but a capital expenditure not deductible in full. We thus reject the viewpoint of the assessee of such an expense being of revenue nature. Explanation 1 to section 32 provides that where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal by the assessee arises out of the order passed by the CIT(A) on 27.01.2014 in relation to the assessment year 2005-06. 2. The first issue involved in this appeal is against the confirmation of addition of ₹ 1,95,320/-, being legal and professional expenses incurred in relation to shares buy back. 3. Briefly stated, the facts of this ground are that the assessee claimed deduction for Legal and professional charges. The AO held some of such expenses to be capital in nature. An ad hoc disallowance of ₹ 5 lac was made on this score. The ld. CIT(A) reduced the disallowance to ₹ 1,95,320/-, being the expenditure relating to buy back of shares, by relying on the judgment of the Hon ble Supreme Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pos this ground are that the assessee claimed deduction under the head Repair maintenance at ₹ 8,28,304/- On perusal of the details, it transpired that a number of expenses were incurred for renovation of building. The AO treated this amount as capital expenditure and disallowed the same. The ld. CIT(A) upheld the disallowance. 8. After hearing the ld. DR and perusing the relevant material, it is observed that the assessee incurred expenses of ₹ 8,28,304/- on a rented premises. Such expenses are in the nature of renovation of building. The Hon ble Supreme Court in Ballimal Naval Kishore vs. CIT (1997) 224 ITR 414 (SC) has held that the expenditure incurred by the assessee on total renovation of cinema theatre by install ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but in respect of which the assessee holds mere occupancy rights, cannot be allowed deduction as a revenue expense, but such expenditure of a capital nature is liable to be considered as a building owned by the assessee for the purposes of section 32 and hence depreciation is allowable pro tanto. In view of the above discussion, by which we have held that the expenditure incurred by the assessee in respect of the building is a capital and not a revenue expenditure, we hold that the assessee is entitled to depreciation at the stipulated rate. The AO is directed to allow such depreciation as per law after allowing a reasonable opportunity of hearing to the assessee. 10. In the result, the appeal is partly allowed. Order Pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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