2012 (5) TMI 656

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....dition of Rs. 20,80,434/- on account of repairs & maintenance of rented premises. 3. Briefly stated, the facts of this ground are that the assessee is engaged in the business of hiring of studios to producers of TV serials and advertisement films. The assessee claimed deduction of Rs. 9,93,585/- towards repairs & maintenance expenses and Rs. 10,86849/- towards studio floor revamping expenses. On being called upon to justify the deductibility of such expenses, the assessee stated that it had taken premises on lease from a company which consisted of seven large sheds of Aarey authorities, inside which the studio floors were constructed. Considering the nature of expenditure comprising of buying the ply and laminates, paint and hardware, fo....

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....penditure so incurred by the assessee has direct nexus with the earning of income from the hiring of studios to producers. When the receipts on account of use of studio is taxable, how the expenditure incurred to earn such, which otherwise is not of a capital nature, can be categorized as capital, is anybody's guess. In our considered opinion, such type of expenditure can, by no stretch of imagination, be capitalized. Page 137 of the paper book is detail of such expenses incurred from year to year basis starting from AY 2003-04 upto AY 2009-10. Scrutiny assessment was made by the AO for AY 2003-04 in which he made disallowance at 10% of repairs & maintenance for the reason that the vouchers were not supported by bills. Copy of assessment or....

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....oan confirmations in respect of new loans greater than Rs. 1 lakh. Since no evidence was filed, the AO made addition of Rs. 22.27 lakhs representing credits in the names of Mrs. Kirtida Ramesh Mehta (Rs.3,05,383/-), Ms. Prabhu G. Deo (Rs.8,54,962/-) and Mr. Ramesh Mehta (Rs.10,67,518/-). In the first appeal, the assessee filed certain evidence in support of the genuineness of the credits. The ld. CIT(A) refused to admit such evidence and sustained the addition. 6. Having heard the rival submissions and perused the relevant material on record, it is observed that the assessee filed confirmations and other documents in support of the genuineness of the credits before the ld. first appellate authority, which were not admitted. Some addition....

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.... assessee and ordered for the deletion of addition. 8. Having heard the rival submissions and perused the relevant material on record, it is observed that the assessee had to incur interest liability of Rs. 6.36 lakhs in this year on account of the demand raised by Aarey authorities. The liability towards such interest, though relating to earlier year, got crystallized for the first time in the current year, when the assessee was made to make good the deficiency in deposit, which was earlier not disputed. As the demand for interest was raised on the assessee in this regard for the first time in the year, it cannot be held that interest of Rs. 6.36 lakhs has assumed the character of prior period expenditure. In our considered opinion, the....