TMI Blog2021 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee could produce rental agreements, the ld. CIT(A) has allowed capitalization of payments related to building. It is a settled proposition that the onus to prove the expenditure lies upon the assessee. Since the assessee has failed to prove the nature of expenditure, no infirmity in the order passed by Ld. CIT(A) on this issue. Restricting the depreciation to 10% in respect of interior and other expenses incurred on the showrooms - HELD THAT:- Facts clearly demonstrate that the expenditure incurred by the assessee cannot be termed towards temporary structures. Another fact that the assessee, on the first issue, has sought capitalization of entire amount of ₹ 14,55,919/-. On the above said amount also, the assessee had c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00% claiming that they are temporary constructions. During the course of assessment proceedings, the A.O. asked the assessee to produce bills vouchers in support of purchase of furniture and fixtures. The assessee could not produce bills for an amount of ₹ 14,55,919/-. Hence, the A.O. disallowed the same holding that the assessee could not prove the expenditure. For the remaining amount of ₹ 37,47,667/- the assessee produced bills. It was submitted that the assessee is having showrooms at various places taken on rental basis and these expenses have been incurred on interior decoration of the said showrooms. Since, these show rooms are run on rented premises, it was contended thatthese expenditures are to be categorized as temp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rent. It was submitted that these expenses have been incurred during the time of setting up of the showroom and hence, they have been capitalized in the books of accounts. Considering the rental agreement, the A.O. took the view that electricity charges of ₹ 15,288/-, rent of ₹ 5,00,000/- and shop insurance of ₹ 33,427/- (all related to the premises taken on rent through rental agreement) can be allowed to be capitalized and depreciation @ 10% be allowed. Accordingly, the Ld. CIT(A) confirmed the disallowance of remaining amount and directed to allow depreciation @ 10% on the above said 3 payments. 6. With regard to the disallowance of depreciation on the remaining amount of ₹ 37,47,667/-, the Ld. CIT(A) notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduce rental agreements, the ld. CIT(A) has allowed capitalization of payments related to building. It is a settled proposition that the onus to prove the expenditure lies upon the assessee. Since the assessee has failed to prove the nature of expenditure, I do not find any infirmity in the order passed by Ld. CIT(A) on this issue. 9. The next issue relates to restricting the depreciation to 10% in respect of interior and other expenses incurred on the showrooms. I noticed earlier that the Ld. CIT(A) has given a categorical finding that interiors, furniture and fixtures installed in the year 2008 continued to be used even in the year 2019. Accordingly, the Ld. CIT(A) has observed that these expenses have given enduring benefit to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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