TMI Blog1995 (3) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... see was paying monthly rent of Rs. 400 which was unilaterally raised to Rs. 2,671 w.e.f. 1-3-1982. The assessee carried out repairs/renovations and incurred a sum of Rs. 2,22,453. The details of these expenses are under the head 'Renovation account' and are available at pages 7 and 8 of the assessee's compilation. These are mostly cash payments in respect of certain bills. 3. The Assessing Officer was of the opinion that these renovations carried out by the assessee resulted in enduring benefit to him and hence the entire expenditure was of capital nature. He, accordingly, disallowed a sum of Rs. 2,22,453 but directed the allowance of depreciation on the same. The learned CIT(A) upheld the action of the Assessing Officer. 4. Shri B.S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in the environments of the business involved and the circumstances and the enduring nature is not the sole test to take the expenditure out of the ambit of a revenue expenditure. In that case also, the assessee carried on business in the premises taken on lease. The assessee had to keep those premises in a good condition and spent a sum of Rs. 22,301 on the repairs. The said expenditure was held to be revenue in nature. 6. Reliance was placed on the Delhi High Court judgment in the case of Modi Spg. Wvg. Mills Co. Ltd. v. CIT [1993] 200 ITR 544. In that case also, building had been taken on lease for a limited period and the assessee incurred expenditure on fixing a false ceiling, painting and making some structural changes. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding for its renovation or alteration, he does not acquire any capital asset because the building does not belong to him. Reliance was also placed on the Calcutta High Court judgment in the case of CIT v. Dewar's Garage (India) (P.) Ltd [1993] 204 ITR 763. That was a case where the assessee being a tenant had received a demolition notice and had to carry out repairs to maintain structure and for that purposes had incurred an expenditure of Rs. 2,12,266, the said expenditure was held to be revenue expenditure because the renovation on re-conditioning was for maintaining the continuity of the business. 9. The learned Counsel for the assessee also relied on another-judgment of the Calcutta High Court in the case of Cultural Enterprises Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding a new urinal and errecting a new boundary wall. The learned Counsel for the assessee vehemently argued that so far as the instant case was concerned, the expenditure incurred on the premises taken on lease was only to run his business more efficiently and more profitably and that there was no enduring benefit accruing to the assessee from such expenditure. 12. The learned DR. submitted that the assessee had not given any breakup of the expenses as to how much was on fittings and furniture and how much on other things. It was submitted that the renovation account did not incorporate any details which could give the correct nature of the work done by the assessee. It was also submitted that the assessee previously was carrying on ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one purely for carrying out the necessary repairs was certainly admissible as an allowable expenditure and in this category would fan the re-doing of the flooring, the slight adjustment of mezzanine floor, the provision of false ceiling and the shifting of the stair-case. Th e case law cited by the learned Counsel for the assessee supports the assessee's case that the expenditure incurred on the aforesaid items was basically by way of repairs and to give a new look to the business premises to suit the taste of the clientele and to attract better customer. This expenditure was not running the business more efficiently and more profitably. Since the premises did not belong to the assessee but had been taken on lease, the expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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