TMI Blog2020 (12) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. It is a fact on record that the tenancy agreement has been executed and registered under the Maharashtra Rent Control Act,1999. Also a fact on record that the monthly rent paid by the assessee and the landlord has been allowed as expenditure. That being the case, there is no reasonable basis for disallowing the stamp duty and registration charges by holding it as capital expenditure. Though Commissioner (Appeals) has referred to a Board resolution to conclude that the assessee has acquired enduring right over the property, however, the terms of the tenancy agreement speak differently. If one goes by the tenancy agreement, there cannot be any doubt that there is no perpetual right granted to the assessee. In view of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Assessee : Shri Vipul J. Shah For the Revenue : Shri Gurbinder Singh ORDER PER SAKTIJIT DEY. J.M. Captioned appeal has been filed by the assessee challenging the order dated 28th December 2018, passed by the learned Commissioner of Income Tax (Appeals) 10, Mumbai, pertaining to the assessment year 2013 14. 2. In ground no.1, the assessee has challenged the disallowance of ₹ 33,49,861, paid towards stamp duty and registration fee at the time of registration of tenancy agreement. 3. Brief facts are, the assessee is a resident company. For the assessment year under dispute, the assessee filed its return of income on 1st November 2013, declaring total income of ₹ 16,68,789. In the course of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived the facts while concluding that the tenancy right acquired by the assessee is perpetual in nature, hence, a capital asset. Drawing our attention to the tenancy agreement dated 18th March 2013, a copy of which is placed at Page 18 of the paper book, the learned Counsel submitted, the tenancy right acquired by the assessee is on monthly basis and is revocable. He submitted, while treating the expenses claimed by the assessee as capital expenditure by treating the tenancy rights as capital asset, the Departmental Authorities have completely missed out the aforesaid factual position. The learned Counsel submitted, the Departmental Authorities have also ignored the fact that the tenancy agreement has been executed under the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that initially the assessee was granted lease/tenancy rights for a period of 35 years which ended in the year 2003. Thereafter, there was no lease/tenancy agreement between the assessee and the landlord. It appears from the tenancy agreement that the landlord had filed a suit for eviction against the assessee. Subsequently, the assessee approached the landlord for continuing as a tenant. After accepting the request of the assessee, the landlord had entered into a tenancy agreement with the assessee on 18th March 2013. The aforesaid tenancy agreement makes it very much clear that the assessee s right is only that of a legal tenant. The agreement further stipulates that the assessee has to pay a monthly rent of ₹ 15,000, exclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n transferred to the assessee. It is a fact on record that the tenancy agreement has been executed and registered under the Maharashtra Rent Control Act,1999. It is also a fact on record that the monthly rent paid by the assessee and the landlord has been allowed as expenditure. That being the case, there is no reasonable basis for disallowing the stamp duty and registration charges by holding it as capital expenditure. Though, learned Commissioner (Appeals) has referred to a Board resolution to conclude that the assessee has acquired enduring right over the property, however, the terms of the tenancy agreement speak differently. If one goes by the tenancy agreement, there cannot be any doubt that there is no perpetual right granted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer and learned Commissioner (Appeals). 13. We have carefully considered the rival submissions and perused the material on record. Undisputedly, the expenditure claimed by the assessee was disallowed solely for the reason that the chemical business of the assessee is no longer in existence. However, it is the claim of the assessee that the business has not been closed permanently. In our view, if the assessee can bring on record sufficient evidence to prove that the business is continuing and has not been permanently closed, the expenditure relating to such business has to be allowed. However, since the assessee requires to establish its claim through proper evidence, we are inclined to restore the issue to the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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