TaxTMI 
TaxTMI 
2015 (10) TMI 1277
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....ch sum in the computation of taxable total income was wrong, erroneous, unjustified, incorrect and not sustainable in law. 4. The CIT (Appeals) failed to appreciate that the provisions especially explanation (1) below section 32 of the Act was wrongly understood by the Assessing Officer and ought to have appreciated that misreading of the said provisions on the factual matrix of the case would vitiate the action in relation thereto. 5. The CIT (Appeals) went wrong in recording the findings in this regard in para 4 of the impugned order without assigning proper reasons and justification. 6. The CIT (Appeals) erred in sustaining the disallowance of loading and unloading charges aggregating to Rs. 82,132/- in the computation of taxable total income without assigning proper reasons and justification. 7. The CIT (Appeals) erred in sustaining the disallowance of tractor rent amounting to Rs. 1,35,000/- in the computation of taxable total income without assigning proper reasons and justification. 8. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing the impugned order and any order passed in violation of the principles of natural justice ....
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....helps the assessee to increase the enduring capacity of the assessee in the business the Assessing Officer has rejected the claim of the assessee that it is only a revenue expenditure and treated the same as capital in nature and allowed a depreciation. Since the department has filed SLP on the decision of the jurisdictional High Court in the case TVS Lean Logistics Ltd., 293 ITR 432 and also the revenue has filed appeal in RMKV & Sons, Tirunelvelli before the Tribunal on similar issues and also taking into account in the case of M/s. Remington (India) Limited wherein it was held that "if the expenditure has becomes an integral part of the leased property, then the same should be allowed as deferred expenditure over the period of lease. In case the expenditure is incurred for bringing up a new asset in the nature of expenditure is incurred for bringing up a new asset in the nature of furniture and machinery, which do not form on become an integral part of the leased premises, the same cannot be treated as 'revenue expenditure". The additions made by the Assessing Officer at Rs. 17,09,066/- after allowing depreciation, is confirmed, and the grounds of appeal filed by the assesse....
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....ee during the tenure of the lease period which was for a short period. The assessee relied on the following judicial precedents:- (i) The co-ordinate bench decision in the case of ACIT vs. M/s Sundaram Asset Management Co. Ltd, Chennai in ITA No.1241 & 1154/Mds/2014, dated 22nd August, 2014, wherein it was held as under:- "10. Heard both sides. Perused orders of lower authorities and the decision of this Tribunal relied on. The Assessing Officer while completing the assessment disallowed these expenses claimed by the assessee towards renovation and repairs treating the same as capital expenditure. On appeal, the Commissioner of Income Tax (Appeals) following the decision of the co-ordinate Bench of this Tribunal in assessee's own case for the assessment year 2008-09 deleted the disallowance, against which the Revenue is in appeal before us. This Tribunal while dealing with similar issue in assessee's own case for the assessment year 2008-09 observed as under:- "iv. The fourth ground of appeal of the assessee relates to repairs of lease-hold premises. The assessee has placed on record at Page No. 42 of the Paper Book, the nature of work carried out by the assessee in the l....
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....is directed to grant the assessee the claim of revenue expenditure in regard to the said expenditure. Consequently, the depreciation as allowed by the Assessing Officer on the said expenditure which has been capitalized would stand reversed. Whether the expenditure incurred on renovation of a building is capital or revenue, is a question of fact. The same has to be decided on the facts of each case. We find that the facts of the case of the assessee are similar to the one adjudicated by the Tribunal mentioned above. The civil work relates to the interior decoration and creation of the office atmosphere. Respectfully following the decision of the co-ordinate bench of the Tribunal, this ground of appeal of the assessee is allowed and the expenditure incurred by the assessee in modifying the interiors of a building into office are held to be revenue in nature." 11. The co-ordinate Bench considered a similar issue where the assessee claimed expenditure on civil work which includes demolition, painting, flooring and partition etc. as revenue expenditure. The Tribunal after considering Explanation 1 to section 32(1) and also the decision of the co-ordinate Bench of this Tribunal in the....
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....se and can only be revenue expenditure. In the present case, according to the Ld. DR, the assessee carried on construction of super structure on leasehold land which cannot be considered as an improvement or repair. 7. We have heard the parties and perused the record. In the present case, the assessee has taken the land on leasehold on which the assessee constructed super structure and claimed as revenue expenditure. The same was disallowed by the CIT(A). The Ld. DR contended that the assessee constructed the building in the leased land and it is not the case of renovation of the leased building or improvement of the leased building as in the case of ABT Ltd cited supra as held by the Tribunal. For settling the controversy, we have to go through the Explanation 1 to sec. 32(1) of the Act which was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 1.4.1988 which deals with the situation where the expenditure has been incurred by the assessee on construction of any structure on leasehold premises. The Explanation 1 is reproduced herewith below: "Explanation 1. Where the business or profession is carried on in a building not owned by h....
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....on of the assessee, but not in a case of construction of any structure or doing any work or relation to where such building is put up/constructed for the purpose of business or the profession of the assessee in a land taken on lease by the assessee." 10. In the above case, the assessee has taken land on lease and made certain construction. It is the case that the assessee has constructed a new building on the leased land. The High Court has further held in the aforesaid case that the language employed in a statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used in the Legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result an any departure from the literal rule would really be amending the law in the garb of interpretation, which is not permissible and which would be destructive of judicial discipline. 11. The Supreme Court of India in the case of Madras Auto Service (P) Ltd., 233 ITR 468 while dealing with a similar controversy has observed as under: "5 In order to decide whether this expenditure is revenue expenditure or ....