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| The Tax Publishers2020 TaxPub(DT) 4175 (Mad-HC) INCOME TAX ACT, 1961
Section 37(1)
Where assessee had incurred substantial expenditure towards renovation leading to enduring benefit and they were not merely repairs and also incurred expenditures towards improvement and construction of the building, however, these cannot be termed as 'repairs' and submission advanced by assessee that case should be remitted back to AO was also rejected since the facts of case have been addressed and settled by authorities, therefore, appeal of Revenue was allowed.
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Business expenditure - Expenditure incurred on lease premises towards civil works, furniture, etc. - Revenue expenditure or capital expenditure -
Issue arose for consideration as to whether Tribunal was right in law to hold that the expenditure incurred by assessee on the lease premises towards civil works, furniture, etc., was a revenue expenditure, when Explanation 1 to clause (ii) of sub-section (1) of section 32 provides that any capital expenditure on the lease premises is to be taken as capital expenditure. Held: Assessee had incurred substantial expenditure towards renovation leading to enduring benefit and they were not merely repairs. Assessee had also incurred expenditures towards improvement and construction of the building. These cannot be termed as 'repairs'. The second alternate submission advanced by assessee that case should be remitted back to AO was also rejected since the facts of case have been addressed and settled by Authorities and it had been concurrently found that the expenditure were capital in nature. Therefore, appeal of Revenue was allowed.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2008-09 & 2009-10
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