TaxTMI 
TaxTMI 
2014 (12) TMI 753
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.... asset in balance sheet; the details of which are as under:- Additions to Fixed Assets Opening Bal (01.04.2006) Additions Total (31.03.2007) Buildings 5,42,35,839 2,15,52,652 7,57,88,491 Electric Fitting 26,78,535 35,73,351 62,51,886 Furniture & Fixture 54,23,36 28,75,878 82,99,204 Air Conditioners 11,64,636 18,07,364 29,72,000 Computers 36,29,009 8,44,603 44,73,612 4. All expenses in the existing showroom and workshop at Ahmedabad were debited as building repairs and maintenance. All new construction work for extension of showroom/workshop was capitalized to fixed assets as mentioned above. The company has all bills/vouchers and supporting evidences for expense debited as building repairs and maintenance. The assessee submitted that the expenditure claimed as repairs to showroom was incurred as per norms/instructions of Honda Siel Cars India Ltd in order to increase the efficiency in working and for promoting the business prospects. Hence, the same was laid down wholly and exclusively for the purpose of the business. The business expenditure was incurred for running the profit making company more efficiently and in a better manner. ....
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....ailing for stair case 4,86,951/- 3 Sanitary & Hardware fittings 1,74,897/- 4 Paint & Wooden blinds & Pest control 4,36,719/- 5 Glass and Aluminium door / windows (4026668 - 13919) 40,12,749/- 6 Fees to various Consultants 7,48,965/- 7 Bills of Design Council, Shreeji Construction and other labour charges for re-doing plaster, breaking/ shifting, etc. 37,85,257/- 8 Misc. expenses 1,33,161/- Total 1,11,58,689/- It is to be appreciated that by incurring these expenses, the appellant has not acquired any new capital asset. Out of the major expenses of Rs. 71,86,752/-, only 45% is disallowed being capital expenses which is not in accordance with law. Under the scheme of the Income Tax Act, the expenses can be either a capital expenditure or revenue expenditure but there is no provision to hold very same expenditure partially as capital and partially as revenue. The treatment to 45% expenditure as capital is purely subjective and without any basis. If major part thereof i.e. 55% is considered as revenue expenditure, it supports the view of the appellant that the entire expenditure which is purely for renovation of the existing bui....
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....of dealing in Cars / Spares of Honda Company can legitimately think it expedient to prepare its show room, workshop in accordance with such standards The Hon'ble Supreme Court in the case of Alembic Chemical Works Co. Ltd. V/s. CIT 177 ITR 377 held, "It would, in our opinion, be unrealistic to ignore the rapid advances in researches in antibiotic medical microbiology and to attribute a degree of endurability and permanence to the technical know-how at any particular stage in this fast changing area of medical science. The state of the Art in some of these areas of high priority research is constantly updated so that the know-how cannot be said to be the element of the requisite degree of durability and non-phemerality to share the requirements and qualifications of an enduring capital asset. The rapid strides and science and technology in the field should make us a little slow and circumspect in too readily pigeonholing an outlay, such as this as capital." The idea of 'once for all' payment and 'enduring benefit' are not to be treated as something akin to statutory conditions; nor are the notions of 'capital' or 'revenue' adjudicial fetisn. What is....
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...., since no new asset came into existence but merely to accommodate installation of IBM machine, the expenses were held to be revenue in nature. Most of the decisions of Hon'ble Supreme Court as well as Hon'ble Gujarat High Court supports the case of the assessee. Since in the present case, the expenses were incurred for efficiently using the existing space in a better manner as also to suit the principles requirement, and since no new floor area has been added or any capital asset has come into existence and hence, the expenses on repairs & renovation are allowable as revenue expenditure. The AO was also not justified in partially treating the major expenses of Rs. 71,86,7527- to the extent of 45% as capital and balance 55% as revenue. The expenses based on the copies of the bills filed and the nature of the same are found to be revenue in nature and hence allowable as such. Accordingly, the disallowance of Rs. 56,59,254/- is to be deleted. Consequently, the depreciation allowed on the same is also to be withdrawn. As such appellant gets relief of Rs. 50,93,329/-." 9. The Departmental Representative supported the order of the Assessing Officer and the Authorized Re....