2007 (6) TMI 44

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....re 2001-02 and 2002-03 respectively.  The assessee claimed the expenditure incurred by it on construction of a building, concededly on leasehold land, as revenue in nature.  But, the Assessing Officer treated it as capital expenditure by orders dated 23.3.2004 and 7.2.2005 respectively.  Against the said orders, the assessee preferred appeals, which were, by common order dated 21.9.2005 dismissed by the Commissioner, upholding the order of the Assessing Officer.  3. Contending that Explanation 1 to Section 32(1) of the Act would cover the situations of construction on premises taken on lease, since the assessee was not the owner of the building, the expenditure could only be treated as revenue in nature, the assessee ....

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....re the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee. " 5. It is not in dispute that the assessee had put up the impugned construction of building only on the leasehold land and no building was taken on lease by the assessee.  Therefore, the fiction ....

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....gislation, vide NASIRUDDIN v. SITA RAM AGARWAL [2003] 2 SCC 577. 7. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule and even if the literal interpretation results in hardship or inconvenience, it has to be followed.  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 ....