TMI Blog2018 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... asset of an enduring nature. Any expenditure incurred by the assessee, for making the premises suitable for carrying on its business, according to its own standard has been held to be revenue in nature in a number of cases. Hon'ble Delhi High Court in the case of CIT vs. M/s. Hi Line Pens Pvt Ltd [2008 (9) TMI 25 - HIGH COURT DELHI] had considered similar expenditure incurred towards false ceiling, fixing tiles, replacing glasses, wooden partitions, replacement of electric wiring, earthing, replacement of GI pipes etc., and after taking note of all the judicial precedents on the issue as well as the applicability of Explanation (1) to section 32(i) of the I.T. Act has held that the expenditure incurred to make its premises taken on leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure as revenue. When asked to substantiate its claim, the assessee, vide letter dated 21.03.2013 explained that it has made some additions to the leased premises at its marketing office, projects division office and branch office in Pune and the additions are on account of fixtures like partitions, false roofing, glass and minor civil works. It is submitted that the amount spent on electrical installations is shown under Plant Machinery . The AO was however, of the opinion that the assessee had made additions to the assets and the expenditure thereon was capital in nature. Therefore, he disallowed the claim of revenue expenditure and treating it as capital expenditure, allowed eligible depreciation thereon. Aggrieved, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he following premises on lease: i) Premises at Ameerpet for a period of 5 years commencing from 1.9.2009; ii) Premises at Pune for a period of 33 months commencing from 25.4.2008 to 24.01.2012; and iii) Premises at ECIL Post, Hyderabad for a period of 25 years. 4. From the assessment order, it is also seen that the assessee has incurred an expenditure on the building at Ameerpet and also towards furniture and fixtures at Ameerpet, Hyderabad as well as at Pune. The assessee has explained that the expenditure incurred on false ceiling is debited to the building a/c, while the expenditure incurred on partition etc., is debited to the furniture and fixtures a/c. The learned Counsel for the assessee submitted that the expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken three properties on rent but expenditure incurred during the relevant financial year is only on two properties i.e. one at Ameerpet, which was taken on lease for 5 years and the other one at Pune which was taken on lease for a period of 33 months. Therefore, the expenditure incurred on false ceiling as well as partition, glass etc., cannot be held to be creating any asset of an enduring nature. Any expenditure incurred by the assessee, for making the premises suitable for carrying on its business, according to its own standard has been held to be revenue in nature in a number of cases. The Hon'ble Delhi High Court in the case of CIT vs. M/s. Hi Line Pens Pvt Ltd in ITA No.1202/2006 dated 15.09.2008 had considered similar expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fact. It has not brought about any new asset and more importantly it was not the intention of the assessee to bring about any new capital asset. The expenses that were incurred by the assessee were towards repairing the premises taken on lease so as to make it more conducive to its business activity. Such expenses would clearly fall within the expression of repairs to the premises as appearing in Section 30(a)(i). The legislature has made a distinction between expenses incurred by a tenant for repairs‟ of the premises and expenses incurred by a person who is not a tenant towards current repairs‟ to the premises. This distinction has to be given meaning. Perhaps the logic behind the distinction was that a tenant would, by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
