TaxTMI 
TaxTMI 
2013 (7) TMI 619
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....by the Assessing Authority for the assessment years 1997-98 and 1998-99. 2. The facts of the case are as follows: Mr. Lawrence D'Souza is running a Hotel business under the name and style Ceaser's Restaurant at Mahalakshmi Chambers, 9/1, M.G.Road, Bangalore in rented premises. The assessee purchased the said restaurant for a sale consideration of Rs.70,00,000/-. The agreement to sell was executed on 21-06-1995 between the assessee and Mr. Lawrence D'Souza. As per the agreement to sell, all the assets including kitchenware, furniture and fixtures, kitchen equipment, air-conditioners, electrical fittings, telephone connections, musical system, Bar license and Hotel license were agreed to be sold except name and goodwill of Ceaser's Rest....
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....Hence, the assessee is entitled to write off of revenue expenditure to an extent of 1/15th. However, the Assessing Authority without accepting the contention of the authorised representative, disallowed the deductions as per the assessment order dated 10-03-2000 and 15-03-2000 respectively. 4. The assessee being aggrieved by the assessment order passed by the Assessing Authority preferred an appeal before the Commissioner of Income Tax (Appeals)-II, Bangalore contending that the expenditure incurred towards the tenancy is the revenue expenditure and it cannot be treated as capital in nature in view of the condition imposed in the agreement and the denial of deduction is contrary to law. The Appellate Authority without appreciating the co....
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.... is permitted to use the name of Ceaser's Restaurant for a period of 12 months or such other period as mutually agreed between the parties. The purchase amount of Rs.70,00,000/- was split up, Rs.55,00,000/- was given towards tenancy rights. That expenditure has to be treated as revenue expenditure and it cannot be the capital expenditure. The reason assigned by the Appellate Tribunal is contrary to law. He relied upon the judgment reported in (1993)203 ITR 820 (Karnataka) in the case of COMMISSIONER OF INCOME TAX vs/H.M.T.LTD. 6. On the other hand, Sri. G.Kamaladhar, learned counsel appearing for the respondent contended that the appellant has taken over the Hotel business along with the furniture and fixtures. He was permitted to run th....
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....sed the running Hotel business from one Mr. Lawrence D'Souza with all assets including furniture, fixtures, utensils, Hotel License and Bar License. As per the agreement to sell, the appellant is not supposed to use the name and goodwill of Ceaser's Restaurant. Further the Vendor shall ensure granting tenancy of the said premises in favour of the purchaser by the landlord of the said premises for a period of 15 years subject to payment of higher rent. Further, the Vendor shall negotiate on behalf of the purchaser with the owner for transfer of unexpired lease in favour of the purchaser. For the said consideration, out of Rs.70,00,000/- paid towards sale consideration, Rs.55,00,000/- has been spent towards tenancy rights which is only the re....