TaxTMI 
TaxTMI 
2013 (12) TMI 1151
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....ted property as revenue expenditure. 2. The CIT(A) has erred in law as well as circumstances of the case in not analyzing the fact that Rs. 22,19,954/- paid to MCD by the assessee on account of conversion charges and parking charges in respect of rented property results in providing enduring benefit to the assessee. 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing." 2. The brief facts of the case are that assessee company is engaged in running sweet shop and fast food restaurant in various parts of Delhi. The return of income for the year under consideration was filed on 25.09.2008. The case of the assessee was selected for scrut....
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....have to pay charges to MCD towards parking charges and, therefore, the assessee had paid an amount of Rs. 66,500/- for parking charges and payment of these charges had not given any additional benefit to the assessee and or enhanced the value of premises as the premises was on rent. (ii) That the assessee company had taken the showroom at Moti Nagar on 24.11.2005 and rent started w.e.f 15.02.2006 and after necessary renovation and interior, it had started its outlet in September, 2007. The MCD had fixed some charges on payment of which the parties were allowed to carry on commercial activities or otherwise had to close the business and it was also submitted that the money was spent for the purpose of enabling the company to carry o....
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....e basis of above submissions of the assessee deleted the addition made by AO. 4. Aggrieved the revenue filed an appeal before this Tribunal. At the outset, Ld. DR invited our attention to page 4 of assessment order and argued that one time conversion charges and parking charges were in the nature of capital expenditure as the benefit of these expenses was of enduring nature. It was further argued that assessee had not paid any regular expenses to maintain parking but these were one time charges only and, therefore, were capital in nature. On the other hand, Ld. AR argued that one of the shop was running for past 26 years which was suddenly asked to pay parking charges and parking was already there and, therefore, it has not resulted into....
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....ion of Rs. 66,500/- was made on holding the same to be as one time parking charges. Ld. CIT(A) deleted the addition holding that the payments were made for preventing extinction of appellant's business and had the appellant not made the payment to MCD for regularizing, there would have been no option but to close the business units. The Hon'ble High Court of Delhi in the case of CIT vs J.K Synthetics Ltd. had enumerated broad principles on the basis of various decisions of Hon'ble Supreme Court and Hon'ble High Court, which are as under :- "(i) the expenditure incurred towards initial outlay of business would be in the nature of capital expenditure, however, if the expenditure incurred while the business is on going, it....
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....iently leaving the source or the profit making structure untouched, would be in the nature of revenue expenditure. In other words, expenditure incurred to fine tune trading operation to enable the management to run the business effectively, efficiently and profitably leaving the fixed assets untouched would be an expenditure of a revenue nature even though the advantage obtained may last for an indefinite period. To that extent, the test of enduring benefit or advantage could be considered as having broken down." 9. Similarly, Hon'ble Supreme Court in the case of Bikaner Gypsums Ltd. vs CIT (1990) 53 TAXMAN 279 had held that cost of removal of obstruction which enables the assessee to carry on of mining in an area which had already b....