TMI Blog2017 (1) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance was made. The assessee had incurred the expenditure on a lease property used as holiday home for the employees of the company. The expenses incurred in cash or through DD are towards electricity, water, house tax charges etc. and are for business purposes. Similar is the nature of expenses claimed under repairs and maintenance. Therefore CIT(A) has rightly held that there is no justification for making an ad-hoc disallowance when all bills/vouchers etc. were produced before the AO - Decided in favour of assessee Addition on account of repair and maintenance - Held that:- CIT(A) has perused the bills/vouchers produced before the AO and noted that expenditure incurred is purely on repair and maintenance of the roof and outer areas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eating as capital expenditure a sum of ₹ 11,18,840/- being the routine repair expense incurred on leased premises used for business purposes and which did not bring into existence any asset of any enduring nature. 2. That the appellant reserves to itself, the right to add, alter, amend, substitute, withdraw and / or any ground(s) of appeal on or before the date of hearing. 2. The grounds raised by the Revenue in its Appeal read as under:- 1. On the facts and in the circumstances of the case, the erred in deleting disallowance of ₹ 4,31,517/- made by the AO on account of expenses claimed in the profit and loss account under the head repair and maintenance by ignoring the fact the expenses were not incurred wholly and ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice, copy of ITR allongwith all financial details were filed. Subsequently, notice u/s. 142(1) of the Act alongwith questionnaire was issued and information in support of its claim was called for. In response thereto, the assessee s AR attended the proceedings from time to time and filed the details/information. During the period, the assessee company is stated to be engaged in the business of retail distribution of petrol, LPG and related products, fast food business and letting of properties. AO observed that in the absence of evidences or proper vouching by the assessee, he made the various additions and assessed the income of the assessee at ₹ 33,23,951/- u/s. 143(3) of the I.T. Act, 1961 vide his order dated 14.11.2014. 4. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014. The assessee had also stated before the AO that the expenses incurred were normal routine business expenses. The AO however, was of the view that in the absence of proper vouching, the claim of expenses is not entirely correct. He therefore, disallowed 50% of the claim of cash expenses i.e. ₹ 93,397/- ₹ 3,38,120/-under the respective heads. It is evident that the disallowance made is completely ad-hoc without specific finding as to how the expenditure incurred is not for business purpose. It is not the case of the AO that the expenditure claimed is not genuine. Since all bills/vouchers and ledger accounts were before the AO, it would have been appropriate that specific vouchers etc. were identified before the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same as capital in nature was not in order and was therefore rightly deleted which does not need any interference on our part, hence, I uphold the same and accordingly, the ground no. 2 raised by the Revenue is dismissed. 8.3 With regard to ground no. 3 relating to deletion of addition of ₹ 24,66,305/- on account of repair and maintenance raised in Revenue is concerned, the AO has disallowed expenses of ₹ 35,85,145/- incurred on repair and maintenance for maintenance of leased property at 42, Janpath used by the assessee as its office by treating it as capital expenditure. I find that Ld. CIT(A) has observed that the expenditure has been incurred on painting, polishing, repair of false ceiling, water proofing treatment, til ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been incurred on painting, polishing, repair of false ceiling, water proofing treatment, tile work, dismantling of roof and other miscellaneous repairs and nowhere it is mentioned that casting a new roof. These items like painting, polishing, repair of false ceiling, water proofing treatment, tile work, dismantling of roof and other miscellaneous repairs works comes under the category of repair and maintenance. Hence, the Ld. CIT(A) has wrongly held that the expenditure of ₹ 11,18,840/- as capital in nature and therefore, not allowable. In view of the above, the addition of ₹ 11,18,840/- is hereby deleted, because the work of dismantling of roof is come under the category of repair and maintenance and is a revenue expenditure. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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