2015 (12) TMI 98

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.... for the leasehold building, as capital expenditure and granted depreciation at 15%, where the assessee claimed it as Revenue Expenditure. 3. The facts of the case are that the assessee incurred an expenditure of A3,89,670/- towards partitions and structures for the building and the assessee claimed the entire amount as revenue expenditure. However, the Assessing Officer observed that as per Explanation 1 to sec 32 of the Act, if an assessee incurs expenditure on leasehold premises for the construction of any structure or doing of any work in or in relation to or by way of renovation of improvement, is considered to be a capital expenditure and depreciation will be provided accordingly. Accordingly, he allowed deprecation at 15%. Aggriev....

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.... Ltd in ITA Nos.1241 & 1154/Mds/2014 for the assessment years 2009-10 & 2010-2011, dated 22.08.2014 is squarely applicable to this case, 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 i....

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....se of M/s. Sundaram BNP Paribas Asset Management Company Ltd., Vs. ACIT (supra), the Tribunal in the aforesaid order has held as under: 5. We have considered the rival submissions. A perusal of the breakup of the expenses which have been disallowed clearly shows that the expenditures are on the interior decorations and creation of the office atmosphere. The expenditure has not resulted in any building coming into existence nor has the existing building been modified or the structure altered. As the existing building has not been altered and there is no change to its structure as a result of the expenditure incurred by the assessee, it cannot be said that the expenditure incurred by the assessee is in the capital field. Further a pe....

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....tion 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 case of M/s. Sundaram BNP Paribas Asset Management Company Ltd. Vs. ACIT in ITA No.518/Mds/2010 dated 7th January, 2011, held that expenditure incurred by the assessee is revenue in nature. Respectfully following the said decision, we hold that the expenditure incurred by the assessee for demolition, painting, flooring, partition, modular and electrical works on the leasehold premises is revenue expenditure. Thus, we uphold the orders of the Commissioner of Income Tax (Appeals) on this issue and reject the grounds of appeal raised by the Revenue''. A similar decision was ta....