TMI Blog2016 (12) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... capital in nature so long as it does not result in creation of any new asset or a benefit, in capital field. Apart therefrom, it is also to be appreciated that the expenditure in question, viz. plastering work, providing grills, granite flooring in corridors, terrace waterproofing, etc. are expenses which facilitate the upkeep of the premises and the enduring benefit, if any, is in the revenue field. Therefore, considering the fact-position, we find no reason to uphold the stand of the Revenue that the impugned expenditure is of capital in nature. Thus, the order of CIT(A) is set-aside and the Assessing Officer is directed to delete the addition. - Decided in favour of assessee. Disallowance u/s 14A - assessee had made a suo moto disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years, the same has been held in favour of the assessee following the judgment of the Hon'ble Bombay High Court in assessee’s own case reported in (1979 (1) TMI 5 - BOMBAY High Court). - ITA NO. 4507/MUM/2012, ITA NO. 4735/MUM/2012 - - - Dated:- 18-11-2016 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER For The Assessee : Shri J.D. Mistry For The Revenue : Shri Pradeep Kr. Singh ORDER PER G.S. PANNU, AM : These are cross-appeals filed by the assessee and the Revenue against the order of CIT(A)-9, Mumbai dated 16.04.2012, pertaining to the Assessment Year 2008-09, which in turn has arisen from the order passed by the Assessing Officer dated 16.12.2010 under section 143(3) of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly. 2 : 0 Re.: Disallowance u/s. 14A: 2 : 1 The Commissioner of Income Tax (Appeals) has erred in upholding the action of the Assessing Officer of disallowing a sum of ₹ 36,540/- u/s. 14A of the Income-tax Act, 1961, over and above the sum of ₹ 13,000/- disallowed by the Appellant suo-moto by applying the provisions of Rule 8D of the Income-tax Rules, 1962. 2 : 2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject no further disallowance u/s. 14A of the Income-tax Act, 1961 is called for and the stand taken by the Assessing Officer in this regard is erroneous, misconceived and ought to be struck down and the Commissioner of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst which assessee is in further appeal before us. 5. At the time of hearing, the learned representative for the assessee pointed out that the stand of lower authorities is untenable and, in fact, it is based on a wrong appreciation of facts. It has been pointed out that the details culled out by the Assessing Officer in para 18 is based on a bill of a concern, M/s. Painterior and it is pointed out that the expenditure claimed in the instant year in revenue field is only ₹ 39,35,805/- and the balance of it has been either claimed as revenue expenditure in Assessment Year 2007-08 or capitalized in the books of account. In this context, he has furnished the detailed reconciliation, which reads as under :- Malabar Hill Club Ltd. : A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tures. Though the Assessing Officer has canvassed that it results in creation of a new asset, but the details do not reflect so. Even with regard to the enduring benefit brought out by the Assessing Officer, it is to be understood that the enduring benefit in the case of repairs and maintenance may spread beyond one financial year, but that itself would not justify the characterisation of expenditure as capital in nature so long as it does not result in creation of any new asset or a benefit, in capital field. Apart therefrom, it is also to be appreciated that the expenditure in question, viz. plastering work, providing grills, granite flooring in corridors, terrace waterproofing, etc. are expenses which facilitate the upkeep of the premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im with regard to the incorrectness or otherwise of the stand of assessee, having regard to its accounts. In the present case, assessee had suo moto disallowed a sum of ₹ 13,000/- and the same has been mechanically brushed aside by the Assessing Officer and instead, disallowance has been worked out in terms of Rule 8D of the Rules. The aforesaid approach is clearly inconsistent with the mechanics of Sec. 14A(2) of the Act and, therefore, the said action is hereby set-aside and Assessing Officer is directed to retain the disallowance to the extent of ₹ 13,000/- suo moto disallowed by the assessee itself. 11. Before parting, we may also say that assessee raised a point of law to the effect that the formula specified in Rule 8D( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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