RPG Enterprises Ltd. v. Dy. CIT

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The Tax Publishers2016 TaxPub(DT) 3217 (Bom-HC) : (2016) 386 ITR 0401 : (2016) 240 TAXMAN 0614 : (2016) 138 DTR 0049 RPG Enterprises Ltd. v. Dy. CIT INCOME TAX ACT, 1961 --Business deduction under section 30(1)--Repairs and maintenance for buildingsRenovation of premises occupied as a tenant----Expenditure on renovation which gives a benefit or advantage of enduring nature is not in the nature of current repairs, therefore, not allowable as revenue expenditure under section 30.--Assessee claimed deduction of Rs. 47.63 lakhs under the head 'Repairs and maintenance'. AO found that Rs. 31.32 lakhs out of amount aforesaid, related to the premises occupied by the assessee as a tenant and same were substantially capital in nature incurred for renovating the premises by doing civil work. AO, therefore, attributed 75 per cent of Rs. 31.32 lakhs as capital and allowed depreciation thereon at the rate of 10 per cent. Assessee contended that whole amount of Rs. 31.32 was incurred towards current repairs and was allowable under section 30. *Held:* Expenditure, in fact, incurred on account of renovation leading to enduring benefit to assessee so as to enable it to accommodate larger number of employees and to facilitate its trading operations, was capital in nature and AO was justified in apportioning the expenditure in the ratio of 75 per cent and 25 per cent between capital and revenue account respectively as no evidence was produced that estimation based on the facts found, was in any way arbitrary or perverse. Income Tax Act, 1961, Section 30 *REFERRED :* FAVOUR : Against the assessee A.Y. : 1996-97 IN THE BOMBAY HIGH COURT M.S. SANKLECHA & A.K. MENON, JJ. RPG Enterprises Ltd. v. Dy. CIT ITA No. 416 of 2001 29 June, 2016 Appellant by: B.V. Jhaveri a/w B.G. Yewale i/b Rajesh Shah Respondent by: None SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 3217 (Bom-HC) : (2016) 386 ITR 0401 : (2016) 240 TAXMAN 0614 : (2016) 138 DTR 0049

RPG Enterprises Ltd. v. Dy. CIT

INCOME TAX ACT, 1961

--Business deduction under section 30(1)--Repairs and maintenance for buildingsRenovation of premises occupied as a tenant----Expenditure on renovation which gives a benefit or advantage of enduring nature is not in the nature of current repairs, therefore, not allowable as revenue expenditure under section 30.--Assessee claimed deduction of Rs. 47.63 lakhs under the head 'Repairs and maintenance'. AO found that Rs. 31.32 lakhs out of amount aforesaid, related to the premises occupied by the assessee as a tenant and same were substantially capital in nature incurred for renovating the premises by doing civil work. AO, therefore, attributed 75 per cent of Rs. 31.32 lakhs as capital and allowed depreciation thereon at the rate of 10 per cent. Assessee contended that whole amount of Rs. 31.32 was incurred towards current repairs and was allowable under section 30. Held: Expenditure, in fact, incurred on account of renovation leading to enduring benefit to assessee so as to enable it to accommodate larger number of employees and to facilitate its trading operations, was capital in nature and AO was justified in apportioning the expenditure in the ratio of 75 per cent and 25 per cent between capital and revenue account respectively as no evidence was produced that estimation based on the facts found, was in any way arbitrary or perverse.

Income Tax Act, 1961, Section 30

REFERRED :

FAVOUR : Against the assessee

A.Y. : 1996-97

IN THE BOMBAY HIGH COURT

M.S. SANKLECHA & A.K. MENON, JJ.

RPG Enterprises Ltd. v. Dy. CIT

ITA No. 416 of 2001

29 June, 2016

Appellant by: B.V. Jhaveri a/w B.G. Yewale i/b Rajesh Shah

Respondent by: None