TMI Blog2016 (9) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional High Court in the case of CIT v. Ayesha Hospitals (P) Ltd. (2006 (10) TMI 117 - MADRAS High Court) has observed that the expenditure incurred by the assessee on painting, relaying of damaged floors, partitions, etc. in leasehold premises is allowable as revenue expenditure and relevant portion of the order is reproduced hereinabove. Respectfully following the above decision of the Hon’ble Jurisdictional High Court, we direct the Assessing Officer to delete the addition made on this account - Decided in favour of assessee. - I T.A. No. 803/Mds/2016 - - - Dated:- 11-8-2016 - Shri Chandra Poojari, Accountant Member and Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri R. Vijayaraghavan, Advocate For The Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter considering the submissions of the assessee and also on facts, the ld. CIT(A) confirmed the addition made by the Assessing Officer. 4. On being aggrieved, the assessee is in appeal before the Tribunal. By relying on the decision in the case of CIT v. Ayesha Hospitals (P) Ltd. 292 ITR 266 (Mad), the ld. Counsel for the assessee has submitted that the expenditure incurred by the assessee on relaying of damaged floors on the leasehold premises should be allowed as revenue expenditure and prayed that the addition made by the Assessing Officer should be deleted. 5. On the other hand, the ld. DR supported the orders of authorities below. 6. We have heard both sides, perused the materials on record and gone through the orders of auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is a private limited company running a hospital in a leased premises. The assessment year is 1991-92 and the corresponding accounting year ended on March 31, 1991. The assessee-company filed a return of income on October 28, 1991, showing the income at ₹ 3,23,275. Later the case was selected for scrutiny and notice was issued under Section 143(2) of the Income-tax Act (hereinafter referred to as the Act ). Then the assessment was completed under Section 143(3) of the Income-tax Act determining the total income at ₹ 6,80,890. While completing the assessment, the Assessing Officer made an addition of ₹ 1,85,557 as unwarranted expenses on repairs and maintenance of building and held that it is a capital expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Explanation 1 to Section 32(1) of the Act is not applicable to the facts of the case. 6. Heard counsel. The assessee had spent a sum of ₹ 1,85,557 towards painting, re-laying of the damaged floors, partitions, etc. The co-owners were the directors of the appellant. But they were separate entities. The co-owners were admitting the rental income. They were also paying tax on the profits arising out of the hospital. The lease deed spoke of the normal requirements which the co-owners provide. The assessee was putting the building to a special use. No landlord would ever incur or undertake to bear the expenditure. Here the expenditure was incurred by the assessee on a leased property and the same has to be allowed as revenue expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation in cases were the assessee does not own a building. In the present case, the Tribunal had given a finding that it is a revenue expenditure on the ground that the expense is incurred only towards painting, re-laying of the damaged floors, partitions, etc. This expenditure can never be considered to be a capital expenditure of the nature mentioned in the above Explanation. 9. In view of the foregoing reasons, we find no error or legal infirmity in the order of the Tribunal and the same does not require interference. Under these circumstances, we answer the questions of law in favour of the assessee and against the Revenue and the tax case is dismissed. No costs. 7. Admittedly, in the present case, the assessee has lai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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