TaxTMI 
TaxTMI 
2014 (1) TMI 887
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....the validity in law of the assessee's claim for deduction in respect of expenditure incurred in the sum of Rs.53,73,759/- on renovation of its office premises, taken on leave and license basis for a period of 3 years, i.e., from 15.07.2006 to 14.07.2009. The assessee's claim is that it is bound by the terms of the license agreement to keep the premise in a state of good repairs (reasonable wear and tear, as also damaged by fire, tempest or acts of God not attributable to the Licensee, excepted); making good any damages that may be caused by it, and cannot make any structural changes or addition to the said premises without the prior written consent of the Licensor. Accordingly, the work done is of temporary nature, yielding no capital asset....
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.....e., whether the expenditure under reference is revenue or capital in nature. If it is the revenue expenditure, the entire expenditure would stand to be allowed for the current year itself, as claimed by the assessee per its revised computation, though belatedly, and not at Rs.5,44,078/-, as originally claimed per its return of income. If, on the other hand, it is capital expenditure, no deduction in its respect, save as otherwise provided by law, would stand to be allowed. The Revenue has, accordingly, allowed depreciation thereon in terms of Explanation 1 to section 32(1), which reads as under, considering the non claim thereof by the assessee in the prescribed manner as of no consequence in view of Explanation 5 to section 32(1) (which o....
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....(c)). This would also answer the assessee's argument for matching the period of the claim for expenditure over the period of the term of the licensee, which is being pressed vide its Ground No.5. Continuing further, in fact, even in the absence of Explanation 1 to section 32, which of course cannot be overlooked, as the matter has in any case to be decided only in accordance with the law (so that we state so only to emphasize another aspect of the matter), how could, one may ask, an expenditure in the capital field, i.e., capital expenditure by definition, be considered as altered in its nature or character where incurred in relation to a leased premises? Equally, a revenue expenditure would not be rendered as of....
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....diture be considered as only for a change of ambience, as being contended by the assessee and, further, could it be without concomitant value addition? The assessee has before us also not been able to show any infirmity in the said finding/s of fact by the ld. CIT(A). Would the said expenditure, where incurred in relation to own building, be capital expenditure, would be a relevant question to ask. If so, the expenditure under reference is definitely capital expenditure, and if not, revenue. On such observations and views being expressed by the Bench during hearing, the ld. AR would submit that the expenditure under reference would qualify as revenue expenditure, i.e., on these parameters and considerations, and which he could demonstrate w....