TMI Blog2017 (3) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent was necessary for carrying on business as it resulted in increased turnover in the subject Assessment year as compared to the earlier years. Therefore, this expenditure is allowable as deduction under Section 37(1) of the Act as revenue expenditure. The balance of ₹ 23.99 lakhs has been held by the Tribunal to be expenses incurred in normal / regular running of its business and therefore allowable as revenue expenditure under Section 37(1) of the Act. Amounts incurred for repairs of Hotel Building - Held that:- We find that the Tribunal, on examination of nature of expenditure and result of the expenditure in the context of the respondent-assessee's activity of running Five Star Hotel has determined which expenses could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, as under : (i) The first issue is of legal and professional fees paid of ₹ 23.99 lakhs for temporary plan for access and exit during the construction of two floors, to enable the running of the Hotel.; and (ii) The second issue is in respect of expenditure of ₹ 2.37 crores on repairs and maintenance of the Hotel building to enable the running of the Hotel during the construction of the two additional floors. 4. The respondent-assessee is engaged in the business of running a Five Star Hotel and Restaurant. During the subject Assessment year the respondent assessee was constructing two additional floors in its Hotel building. The amount spent on the same was capitalised at ₹ 5.68 crores. In its return of income r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed under Section 37(1) of the Act. So far as the balance expenditure on the above account, is concerned the Tribunal held that those expenses have been incurred in the regular course of Hotel business and has to be allowed. So far as the second issue viz. Repairs and maintenance is concerned, the impugned order considers each head of expenditure and the manner of its use / utility in the running of the Hotel business to conclude that the same was Revenue in nature and allowable under Section 37(1) of the Act. The impugned order restored the issue to the Assessing Officer to restrict the disallowance on account of repairs and maintenance, keeping in view its observation in the impugned order. 8. Mr.Suresh Kumar, learned Counsel for the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s expenditure which was incurred by the respondent was necessary for carrying on business as it resulted in increased turnover in the subject Assessment year as compared to the earlier years. Therefore, this expenditure is allowable as deduction under Section 37(1) of the Act as revenue expenditure. The balance of ₹ 23.99 lakhs has been held by the Tribunal to be expenses incurred in normal / regular running of its business and therefore allowable as revenue expenditure under Section 37(1) of the Act. 11. So far as the second issue is concerned, viz. the amounts incurred for repairs of Hotel Building, we find that the Tribunal, on examination of nature of expenditure and result of the expenditure in the context of the respondentass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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