AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 88
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.... expenditure of Studio No.3; and c) Disallowance of road repairs expenses. 3. We heard the parties and perused the record. The assessee company is engaged in the business of providing infrastructure facilities for shooting and post shooting purpose. The assessment of the assessee was completed by the AO by making various additions and the appeal filed by the assessee before the ld.CIT(A) was dismissed. Aggrieved, the assessee has filed this appeal before us on the issues cited above. 4. The first issue relates to disallowance of interest expenditure u/s 43B of the Act. During the year under consideration, the assessee claimed interest of Rs. 23.34 lakhs payable to M/s Mumbai Metropolitan Region Development Authority (MMRDA) in respect o....
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....gly, the ld.AR submitted that the interest accrued on the loan taken form MMRDA is not covered by the provisions of section 43B of the Act. 6. On the contrary, the ld. DR submitted that the assessee itself has disallowed the interest payable to MMRDA u/s 43B of the Act in the earlier years and further an identical disallowance made by the AO in assessment year 2006-07 has also been accepted by the assessee. Accordingly, the ld. DR submitted that the ld. CIT(A) was justified in confirming the disallowance made by the AO. 7. In the rejoinder, the ld. AR submitted that there is no estoppel against the law and hence mistake committed by the assessee in the earlier years cannot be used against the assessee. 8. We have carefully perused the pr....
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....sec. 43B shall be applicable to the impugned interest, since the same is payable to a Government Company. The assessee has submitted that MMRDA has been formed under the provisions of Mumbai Metropolitan Region Development Authority Act, 1974 and further, as per the provisions of Section 3 of the above said Act MMRDA shall be deemed to be a local authority within the meaning of the term local authority as defined in the Bombay General Act, 1904. 9. It is well settled proposition of law that the provisions of statute should be interpreted strictly and hence the provisions of sec. 43B of the Act can be applied only if the interest claim is hit by the said provision. Hence, what is required to be seen is as to whether MMRDA shall fall under t....
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....xt issue relates to the expenditure incurred on repairs of Studio No.3. The AO took the view that the Studio No.3 was completely damaged in a fire and the assessee has to re-built it afresh and hence the expenditure incurred on re-construction of Studio No.3 is capital in nature. Accordingly, he disallowed the claim of 35.37 lakhs and allowed depreciation thereon at the rate of 10% resulting in a net disallowance of Rs. 31.83 lakhs. The ld. AR submitted that Studio No.3 was partially damaged by a fire that occurred in the year 2002. However, the Studio No.3 was continued to be let out for film shooting purposes. Inviting our attention to pages no.8 to 11 of the paper book, the ld.AR submitted that the assessee has declared the income derive....
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....ed by the assessee should be allowed as revenue expenditure. Accordingly, we set aside the order of ld. CIT(A) on this issue and direct the AO to delete the disallowance. 14. The next issue relates to the disallowance of expenditure incurred on re-surfacing of the roads. The assessee had incurred an amount of Rs. 1.44 cr. on resurfacing of the roads and claimed the same as revenue expenditure. But the AO took the view that the expenditure incurred on resurfacing of roads and asphaltic treatment of the roads is capital in nature. Accordingly, he disallowed the claim of the assessee and allowed depreciation at the rate of 10% thereon resulting in net disallowance of Rs. 1.30 cr. The ld. CIT (A) also confirmed the same. 15. The ld. AR submit....
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....submitted that the expenditure incurred by the assessee has given benefit of enduring nature and hence the ld. CIT(A) has confirmed the view taken by the AO by following the decisions rendered by the Hon‟ble Supreme Court in the cases of Shri Mangayarkarsasi Milll P Ltd V/s (315 ITR 114 (SC) and Ballimal Naval Kishore and Another (224 ITR 414 (SC). 18. We have heard the rival contentions and perused the record. We notice that the assessee is holding an area of 512 acres of land and it is submitted that there is huge stretch of road therein. We notice that the assessing officer has not brought any material to show that the assessee has built any new road. According to the assessee, it has incurred expenditure to re-surface the existin....