TMI Blog2021 (11) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... The second alternate submission advanced by Mr.M.P.Senthil Kumar that the case should be remitted back to the AO is also rejected since the fact have been addressed and settled by the Authorities below and it had been concurrently found that the expenditure were capital in nature. The issue of bifurcating the said expenses as capital and revenue would therefore not arise. We hold that the substantial questions of law have to be answered in favour of the Revenue and against the Assessee and the Appeals filed by the Revenue have to be allowed. Accordingly, the Appeals are allowed. - T.C.A. No. 303 of 2009 - - - Dated:- 25-11-2021 - Honourable Mr.Justice R.Mahadevan And Honourable Mr.Justice Mohammed Shaffiq For the Appellant : M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for the purpose of their business. Explanation 1 to Section 32(1) is as follows:- [Explanation 1.- Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee. 18. This Explanation had been inserted by the Taxation Laws (Amendment and Miscellaneous P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... H), while examining whether expenditure incurred on repairs to chairs, renovation of building and modernisation of cinema house taken on lease by the Assessee, it was held that they are capital expenditure since it brought an enduring benefit. The relevant discussion on this aspect is quoted below:- It cannot be denied that the amount spent for the construction of the verandh, office room, side room and bath rooms brought into existence an asset of an enduring nature. It is no one's case that only the existing verandah, office, side room or bath rooms were repaired. What appears is that these constructions were brought into being for the purpose of modernising the cinema hall. Therefore, the construction of verandah, office, side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the expenditure incurred by the Assessee in the present case are Capital in nature and come within the mischief of Explanation 1 to Section 32(1) of the Act. The alternate submission advanced by Mr.M.P.Senthil Kumar that the repairs to the premises cannot be capitalised in view of Section 30(a)(i) of the Act is rejected since the renovations made are Capital in nature in the first Assessment Year and only further repairs may attract the provisions under Section 30(a)(i) of the Act. Section 30(a)(i) of the Act is as follows:- 30. In respect of rent, rates, taxes, repairs and insurance for premises, used for the purposes of the business or profession, the following deductions shall be allowed- (a). Where the premises are occupied by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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