TaxTMI 
TaxTMI 
2016 (5) TMI 158
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....g the Hoarding Structures as Building (depreciation @ 10% Rs. 16195) instead of Plant (depreciation @ 15% Rs. 24292) . 1.3 The learned CIT (A) failed to appreciate that the asset hoarding structures being in the nature of plant also meets the condition laid down under the act 2. Interest on loan 2.1 On the facts and circumstances of the case and in law, the learned CIT (A) erred in confirming addition of Rs. 34,932/- out of total interest claimed. 2.2 The learned CIT (A) failed to appreciate that interest expense was incurred wholly and exclusively for the purpose of business of the appellant as amounts receivable are outstanding on account of sales conducted by the appellant and there is direct nexus between the expenditure and business purpose. 2.3 The Learned CIT (A) ought to have held that the estimated disallowance is adhoc, arbitrary and uncalled for. 3. Hoardings Expenses 3.1 On the facts and circumstances of the case and in law, the learned CIT (A) erred in confirming treatment of Hoarding Expenses incurred in respect of Hoardings amounting to Rs. 4,94,500/- being 50% of two bills of hoarding expenses amounting ....
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....ant' and submitted that there is no definition of 'plant' in the Act but in the ordinary sense it includes whatever apparatus is used by a businessman for carrying on his business. The assessee firm also cited the decision of the Hon'ble Supreme Court in the case of Scientific Engineering Houses P. Ltd. v. CIT, 157 ITR 89, 96 wherein it was held that plant includes any article or object fixed or movable, live or dead, used by businessman for carrying on his business and is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business.. The A.O., however, rejected the contentions of the assessee firm and held that by no stretch of imagination can the hoarding site be considered as a 'plant' which on itself can actively or passively result in generation of a service/product to constitute a plant. The A.O. relied upon the decision of Hon'ble Apex Court in the case of CIT v. Anand Theatres [2000] 110 Taxman 338 (SC) ,wherein the Hon'ble Apex Court held that such buildings cannot constitute a plant. The word 'plant' specified in Section 43(3) of the Act nowhere mentions the word building and with effect ....
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....of the facts available on record and after taking note of decision cited by the appellant in the submissions, I am of the considered view that the AO's action was completely unjustified and incorrect in restricting the depreciation @ 10%. This is also a fact on record that the appellant was allowed depreciation since many years by the Department @ 15% on hoarding structure. Hence also, in my considered view, any deviation on the part of the AO on accepted norms of the Department consistently followed in the appellant's case without having any major change of facts, was not correct. Taking note of all these facts, I consider proper and appropriate direct the AO to allow the depreciation @ 15% to the appellant on such hoarding structure. Thus, this ground of appeal is allowed." 8. On the other hand, the ld. D.R. relied upon the order of the CIT(A) . 9. We have considered the rival submissions and also perused the material on record. It is observed that the assessee firm has claimed depreciation @ 15% on hoarding structure's under the category of 'plant and machinery' while the Revenue authorities have allowed depreciation @ 10% being part of the building. We have observ....
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....ttorney-General, 1906 AC 53.(Ref. Wharton's Concise Law Dictionary- Indian Ed. 15(Concise) -2009, Page 134) . We have observed that the Income Tax Act,1961 u/s 43(3) has given a very wide definition to the word "plant" which is an inclusive definition and not an exhaustive definition, to includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purposes of the business or profession. The term 'Plant' should be given its ordinary meaning as understood by common man and has to be read in the context of particular trade or manufacturing carried on by the tax-payer. The Oxford English dictionary has defined the word 'plant' means "fixtures, implements, machinery and apparatus used in carrying on any industrial process". The dictionary meaning of plant shall not include stock-in-trade or the place where the business is carried on. It is a tool of the trade with which business is carried on. In order to find out whether building constitute 'plant', functional test must be applied but the same test is not conclusive. It must be seen whether the building or structure or part thereof constitute an apparatus or tool of the tax-payer or whether it is mere....
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....g on a trade incurs capital expenditure on the provisions of machinery or plant for the purposes of the trade, there shall be made to him, for the year of assessment in the basis period for which the expenditure is incurred, an allowance (in this Chapter referred to as 'an initial allowance') equal to three tenths of the expenditure." (p. 62) The matter was decided by the majority view and it was held that the dry dock was a plant. For this purpose, Lord Reid considered the definition of the word 'plant' given by Lindley L.J. in Yarmouth v. France [1887] 19 Q.B.D. 647, 658. This definition reads "in its ordinary sense, it includes whatever apparatus is used by a businessmen carrying on his business-not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business." Thereafter it was observed as under : ". . . The dry dock was in our view not the mere setting or premises in which ships were repaired. It was different from a factory which housed machinery, for in the operation of the dock, the dock itself played a part in the control of water and enabled the val....
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....f a factory with machinery inside it, the machinery in all probability would be plant, but equally clearly the factory, the bricks and mortar, would not be plant." 25. It was finally observed that to regard the dock as apparatus was wrong as it was something quite different from the generally accepted conception of 'plant'. 26. Lord Upjohn also disagreed with the majority view by observing that too much emphasis on a functional element ought not to have been given. In a modern sophisticated factory 'purpose built' for a particular manufacture without which the factory would be useless, makes the walls of a factory part of the plant and that is not intended. It was further observed that function is no more than an element for deciding whether it is a plant or a building. 27. We may mention at the stage that even in England House of Lords has repeatedly commented that the word 'plant' is given imprecise application because of the artificial meaning given to it. In Cole Bros. Ltd. v. Phillips (Inspector of Taxes) [1982] (1) WLR 1450. The House of Lords considered the question-whether expenditure incurred in electric lighting installation and conduit and cabl....
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....als in the hotel was on the provision of 'plant'. Lord Wilberforce observed that: "The word 'plant' has frequently been used in fiscal and other legislation. It is one of a fairly large category of words as to which no statutory definition is provided ('trade', office', even 'income' are others) , so that it is left to the court to interpret them. It naturally happens that as case follows case, and one extension leads to another, the meaning of the word gradually diverges from its natural or dictionary meaning. This is certainly true of 'plant.' No ordinary man, literate or semiliterate, would think that a horse, a swimming pool, movable partitions, or even a dry dock was plant- yet each of these has been held to be so: so why not such equally improbable items as murals, or tapestries, or chandeliers ?" [Emphasis supplied] 29. The House of Lords observed that even the 'functional' test was inconclusive. Therefore, the Court suggested that each case must be resolved by considering carefully the nature of the particular trade being carried on, and the relation of the expenditure to the promotion of the trade. Applying that test the Court held : "I do not find it imp....
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....side India, where such motor-car is acquired by the assessee after the 28th day of February, 1975, and is used otherwise than in a business of running it on hire for tourists; (iia) in the case of any new machinery or plant (other than ships and aircraft) which has been installed after the 31st day of March, 1980, but before the 1st day of April, 1985, a further sum equal to one-half of the amount admissible under clause (ii) (exclusive of extra allowance for double or multiple shift working of the machinery or plant and the extra allowance in respect of machinery or plant installed in any premises used as a hotel) in respect of the previous year in which such machinery or plant is installed or, if the machinery or plant is first put to use in the immediately succeeding previous year, then, in respect of that previous year : Provided that no deduction shall be allowed under this clause in respect of- (a) any machinery or plant installed in any office premises or any residential accommodation; (b) any office appliances or road transport vehicles; and (c) any machinery or plant, the whole of the actual cost of which is allowed as a deducti....
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....uctible in determining the written down value for the purposes of clause (ii) ; (vi) in the case of a new ship or a new aircraft acquired after the 31st day of May, 1974, by an assessee engaged in the business of operation of ships or aircraft or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date for the purposes of business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in items 1 to 24 (both inclusive) in the list in the Ninth Schedule or in the case of new machinery or plant (other than office appliances or road transport vehicles) installed after that date in a small-scale industrial undertaking for the purposes of business of manufacture or production of any other articles or things, a sum equal to twenty per cent of the actual cost of the ship, aircraft, machinery or plant to the assessee, in respect of the previous year in which the ship or aircraft is acquired or the machinery or plant is installed, or if the ship, aircraft, machinery of plant is first put to use in the i....
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....-wells 2. Special rate in respect of factory building (excluding offices, godowns, officers' and employees' quarters, roads, bridges, culverts, wells and tubewells 10 3. Purely temporary erections such as woodeh structure. 100 4. In respect of any structure of work in or in relation to a building referred to in sub-section (1A) of section 32,- (a) Where such structure is constructed or such work is done by way of renovation or improvement to any such building. The percentage specified against sub-Items 1, 2 or 3, as may be appropriate to the class of building in or in relation to which the renovation or improvement is effected ; (b) Where the structure is constructed or work is done by way of extension to any such building The percentage specified against sub-items 1, 2 or 3 as would be appropriate if the structure of work constituted a separate building. &n....
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....ecified description used for the purpose of business or profession. From a careful scrutiny thereof what emerges is: (1) The scheme of section 32 is to provide different rates of depreciation for building, machinery, plant or furniture, ships, buildings used for hotels, aeroplanes and other items mentioned therein. Clause (ii) of section 32(i) specifically provides for grant of depreciation for building, machinery, plant or furniture at prescribed percentage on the written down value thereof. The rates are prescribed under the Income-tax Rules. (2) Under clause (iia) of section 32(1) specific provision is made for new machinery or plant which has been installed and it provides for additional sum equal to one-half of the amount admissible as depreciation under clause (ii) if the conditions mentioned therein are fulfilled. Further, the proviso carves out an exception to the effect that no deduction shall be allowed in respect of any machinery or plant installed 'in office premises or any residential accommodation'. That means the Legislature has divided building into different categories, namely, (i) buildings used for office premises or (ii) for residential accommo....
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....) general rate applicable to machinery and plant and (ii) special rates, which includes machinery and plant for cinematograph films, recording equipments, reproducing equipments, developing machinery, printing machines, synchronisers and studio lights and projecting equipments of film exhibiting concerns. Further, special rates are provided for machinery used in production and exhibition of cinematograph films begin (a) recording equipment, reproducing equipment, developing machines, printing machines, editing machines, synchronisers and studio lights except bulbs and (b) projecting equipment of film exhibiting concerns. Further different rates have been provided for machinery for cinematograph films that includes studio lights except bulbs under the heading C(1) (b) and for bulbs of studio lights under the heading F(2) . From the aforesaid discussion, it is apparent that for a building used as a hotel there is a specific provision for granting depreciation allowance at specified rates depending upon fulfilment of the conditions mentioned therein. Hence, there is no question of referring to dictionary meaning of the word 'plant' which may or may not include building, for a....
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....phasis supplied) 34. Applying the said test, we have to gather the meaning of words 'building' and 'plant' in context of Scheme of section 32 and it is not necessary that we should adopt a judge sense meaning, which is artificial and imprecise in application, given to the word 'plant' in context of different statutory provisions. The Scheme of section 32 unequivocally leads to the conclusion that 'building' and 'plant' are treated separately for the purpose of grant of depreciation. Higher rate of depreciation is granted to 'machinery' and 'plant' as against the 'building' which has more durability. 35. In CIT v. Mir Mohammad Ali [1964] 53 ITR 165 this Court considered the meaning of the word 'machinery' and observed that the word 'machinery' is an ordinary and not a technical word and unless there is something in the context in the Act, the ordinary meaning would prevail. Thereafter, the Court observed: "According to the above definition, a diesel engine is clearly 'machinery'. indeed, rule 8 of the Income-tax Rules treats aero-engines separately from aircraft. It is true that this rule cannot be used to interpret the clauses in the Act but it does show ....
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....on. Further, the Court specifically observed that : "...the business of a hotelier is carried on by adapting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay...." (p. 48) 37. These observations clearly indicate that business of a hotelier is carried on in a building or a premises and building is not an apparatus for running such business. It is a shelter or a home for conduct of such business. The learned counsel also pointed out the decision of the Madras High Court in. CIT v. N. Sathyanathan & Sons (P.) Ltd. [2000] 242 ITR 514 wherein the Court observed that in the case of Taj Mahal Hotel (supra) even after noticing the fact that the dictionary definition of 'plant' includes buildings, the Court did not proceed to hold that the building in which the hotel was run, and wherein the sanitary fittings were used was 'itself plant', and on that ground sanitary fittings used in the hotel were part of the plant and emphasised that section specifically provides buildings used as hotel would indicate hotel building cannot be construed as a 'plant'. We agree with this view of the Madras High Court. 38....
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.... in all cases, is also not satisfied. 39. In England also, there are conflicting decisions involving the question whether structure would be a plant or not and it is stated that each case is required to be decided on facts of that case in Scottish & Newcastle Breweries Ltd.'s case (supra) (decided by the House of Lords) the Court of Appeal observed that though there is no statutory definition of 'plant' for the purpose of section 41 of the Finance Act, 1971, from a series of cases decided, following principles emerge to be settled law. "(i) Something which is properly to be regarded as part of the setting in which a business is carried on and not as part of the apparatus used for carrying on the business is not plant: See J Lyons and Co. Ltd. v. Attorney- General {[1944] Ch 287}. (ii) Something which forms part of the setting of a trade may nevertheless be plant if it is more a part of the apparatus than part of the setting {Jarrold v. John Good & Sons Ltd. [1963] 1 WLR 214 : 40 TC 681]}. (iii) The term 'plant' is not apt to cover the permanent structure of a building in which a business is carried on [John Good & Sons Ltd.'s case]. (iv)....
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.... an attractive setting in which customers will be pleased to sit for the short time required to consume a fast food meal, but their function in the trade does not go beyond that. Considering the facts of this case and various decisions Fox L.J. observed: "In the light of the authorities the position appears to me to be this. There is a well-established distinction, in general terms, between the premises in which the business is carried on and the plant with which the business is carried on. The premises are not plant. In its simplest form that is illustrated by Lord Lowry's example of the creation of atmosphere in a hotel by beautiful buildings and gardens on the one hand and fine china, glass and other tableware on the other. The latter are plant; the former are not. The former are simply the premises in which the business is conducted. The distinction, however, needs to be elaborated, for present purposes, by reference to Lord Lowry's further formulation, namely that the fact that different things may perform the same function of creating atmosphere is not relevant: one thing may function as part of the premises and the other as part of the plant. Thus, "somethi....
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....e to 'machinery or plant'. In the context of that section, the Court observed that plant carries with it a connotation of equipment or apparatus, either fixed or unfixed. It does not convey a meaning wide enough to include buildings in general. The Court pertinently observed that building would not normally be regarded as a plant, do not cease to be buildings and become plant simply because they are purposebuilt for a particular trading activity. Such a distinction would make no sense. Thus, the stables of a racehorse trainer are properly to be regarded as buildings and not plant. A hotel building remains a building even when constructed to a luxury specification. Similarly with a hospital for infectious diseases. This might require special layout and other features, but this does not convert the buildings into plant. A purpose-built building, as much as one which is not purposebuilt, prima facie is no more than the premises on which the business is conducted. 41. In Gray v. Seymour Garden Centre 67 Tax cases 401, the Court of Appeal dealt with a case where assessee expended on the construction of planetaria which was a fix structure designed to maintain plants of many dif....
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.... a hospital building for infectious diseases which might require special layout and other features was not held to be a plant by observing that a purpose-built building is no more than the premises on which the business is conducted. Further, there are hotels of all kinds and hotel business can be carried on in all kinds of buildings, may be pucca or kacha constructions. A building intended to be used or in fact used earlier either as a residential accommodation or business purpose can be converted for running hotel business. Section 32 itself contemplates, hotel business being carried on in residential accommodation including an accommodation which is in the nature of guest house. On occasions hotel buildings may be constructed with a special design and features so as to attract and accommodate certain class of tourists. Similarly with regard to cinema business, it can be carried on in a specially designed and constructed building and also in other buildings. Still, however, it would be difficult to draw a distinction and differentiate by holding that a building which is specially designed and constructed for running a hotel or cinema would be covered by a 'plant' and oth....
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....ed as a 'plant'. 43. As discussed above, the aforesaid contention cannot be accepted. Firstly, it would be difficult to draw a line between a building which is specifically constructed for the aforesaid purposes and buildings which are used for the aforesaid purposes by converting a residential accommodation or industrial premises for such purposes. Secondly, the depreciation as a general principle represents the diminution in value of capital asset when applied to the purpose of making profit or gain. The object is to get true picture of real income of the business. Hence, it can be inferred that the Legislature never intended to give such benefit of depreciation to a 'building' which is usually more durable than 'machinery' or 'plant'. In CIT v. Alps Theatre AIR 1967 SC 1437, the Court considered the question - whether the cost of land is entitled to depreciation under the Schedule to the Income-tax Act along with the cost of the building standing thereon? The Court observed thus :- "(6) It would be noticed that the word used is 'depreciation' and 'depreciation' means : 'a decrease in value of property through wear, deterioration, or obsolescence; the a....
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....ss cannot be held to be a plant because : (1) The scheme of section 32, as discussed above, clearly envisages separate depreciation for a building, machinery and plant. furniture and fittings etc. The word 'plant is given inclusive meaning under section 43(3) which nowhere includes buildings. The rules prescribing the rates of depreciation specifically provide grant of depreciation on buildings, furniture and fittings, machinery and plant and ships. Machinery and plant includes cinematograph films and other items and the building is further given meaning to include roads, bridges, culverts, wells and tube-wells. (2) In the case of Taj Mahal Hotel (supra) , this Court has observed that business of a hotelier is carried on by adopting building or premises in suitable way. Meaning thereby building for a hotel is not apparatus or adjunct for running of a hotel. The Court did not proceed to hold that a building in which the hotel was run was itself a plant, otherwise the Court would not have gone into the question whether the sanitary fittings used in bath room was plant. (3) For a building used for a hotel, specific provision is made granting additional depre....
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....context of the above definitions and meaning assigned to the word 'Plant' vis-à vis 'Building' as elaborated above, it could be seen that the 'hoarding structures' constructed and erected by the assessee firm are permanent structure embedded in the building having foundation. The assessee firm give these 'Hoarding Structures' which are constructed and erected by the assessee firm being permanent structures embedded in the building having foundation for the purposes of advertisement to sister concern Creation Publicity Private Limited , who in-turn allows the entities desirous of advertising their products and services to place and put their advertisements in these hoarding structures. The said Creation Publicity Private Limited has paid revenue of Rs. 54.23 lacs to the assessee firm for the use of these hoarding structures during the impugned assessment year. Thus, in our considered view, these hoarding structures which are permanent structures embedded in the building having foundation, which were constructed and erected by the assessee firm do not satisfy functional test and it cannot be said that these hoarding structures are tools or apparatus with which the assessee fir....
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.... years that the major activities were with its group concerns and a major amount of its receivables from the said parties is still shown as outstanding. The total amount of debtors as per Balance Sheet is Rs. 111 lakhs which includes amount due from group concerns in earlier years which is substantial as compared to the turnover of around of Rs. 54.23 lacs annually for the last many years. The fund flow statement from Balance sheet indicates that the partners capital and current account at the beginning of the year was Rs. 10.23 lakhs and at the end of 10.71 lakhs i.e. average fund of Rs. 10.47 lakhs. Besides there are sundry creditors outstanding at the beginning of the year of Rs. 71.72 lakhs and at the end of the year of Rs. 68.50 lakhs i.e. an average of Rs. 70.11 lakhs. In addition there were temporary funds available by way of provisions created of an average of Rs. 2.63 lakhs. Further there are unsecured loans of Rs. 59.72 lakhs on which the assessee firm is paying interest @ 12% which has been claimed as an expense. The assessee firm has average non-interest bearing funds available of Rs. 83.21 lakhs out of total average funds available of Rs. 142.93 lakhs and the major por....
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.... that the assessee firm has utilized the borrowed funds in the assessee's business, interest paid on such borrowings have to be allowed in full and granting of credit to the sister concern constitutes a part of its business activity, it cannot be held that the assessee firm has utilized its business funds for non-business purposes. The CIT(A) rejected the contentions of the assessee firm and held that during the previous year, the entire sales of the assessee firm is only to its sister concern of Rs. 54.23 lakhs , whereas the sundry debtors outstanding at the end of the year is Rs. 111 lakhs and thus sundry debtors outstanding are equivalent to two years' turnover of the assessee firm, hence, it cannot be said that the credit given by the assessee firm to its sister concern is reasonable. Therefore, in principle, the addition made by the AO is correct and there is utilization of interest bearing funds for advancing the sister concern credit period over unreasonable periods of time. However, the CIT(A) held that the disallowance made by the AO on an estimated basis is not correct. It was found by the CIT(A) that the total interest cost of the assessee firm is Rs. 6,98,075/- and ....
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....see has obtained loan for business purpose and utilised the same for the purpose of business. Interest paid by the assessee on such loan was allowed as deduction from year to year. Therefore there is no dispute with regard to the fact that the expenditure is wholly and exclusively incurred for the purpose of business. The assessee is at liberty to arrange its affairs in such a way which would strengthen business relations and the Assessing Officer cannot put himself in the shoes of the businessman to decide as to what would be the course of action that needs to be taken in a given situation. In the instant case the assessee explained the reasons for permitting group concerns long term credits. Merely because the Assessing Officer views its otherwise, expenditure incurred for the purpose of business cannot be disallowed, particularly in the light of the decision of Hon'ble Apex Court in the case of S.A.Builders Ltd. (supra) . 9. Having regard to overall circumstances of the case, I am of the firm view that the tax authorities have not made out any case for disallowance of 25% of the total claim. The assessing Officer is directed to allow the claim in its entirety." T....
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....curred for the purpose of business. The assessee is at liberty to arrange its affairs in such a way which would strengthen business relations and the Assessing Officer cannot put himself in the shoes of the businessman to decide as to what would be the course of action that needs to be taken in a given situation. In the instant case the assessee explained the reasons for permitting group concerns long term credits. Merely because the Assessing Officer views its otherwise, expenditure incurred for the purpose of business cannot be disallowed, particularly in the light of the decision of Hon'ble Apex Court in the case of S.A.Builders Ltd. (supra) . 9. Having regard to overall circumstances of the case, I am of the firm view that the tax authorities have not made out any case for disallowance of 25% of the total claim. The assessing Officer is directed to allow the claim in its entirety." Respectfully following the afore-said orders of the co-ordinate Bench of the Tribunal as detailed above which was on identical issue, we allow the claim of interest expenditure of Rs. 34,932/- of the assessee company which was disallowed by the CIT(A) vide orders dated 31.12.2012. We ....
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....has made new cement foundation and supporting for the hoarding, the structure of the hoardings consists of frames which were made up of metal reinforced by cement foundation and applied red oxide and other treatments to prevent corrosion and weathering. The AO also issued notice u/s 133(6) of the Act to the parties but they were returned back un-served due to unavailability of parties. Accordingly, the A.O. treated the said expense of Rs. 14.05 lacs as capital expenditure and added to the income of the assessee firm and eligible depreciation @ 10% i.e. Rs. 1.41 lakhs was allowed on account of depreciation by the AO vide assessment orders dated 30-11-2009 passed u/s 143(3) of the Act. 18. Aggrieved by the assessment orders dated 30-11-2009 passed by the A.O. u/s 143(3) of the Act, the assessee firm preferred an appeal before the CIT(A) . 19. Before the CIT(A) , the assessee firm reiterated the submission what was made before the A.O. which are not repeated for the sake of brevity. The CIT (A) observed from the copies of three bills raised by the parties in favour of the assessee firm on account of the hoarding expenses and the 1st bill was dated 15th December 2006 and a sum of....
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....ssessee firm submitted that these are major hoarding expenses which the assessee firm has incurred for the purpose of its business of outdoor advertising business. The repairs to the permanent structure have been undertaken and it was not extensive repair of permanent structure. The A.O. treated the expenses as capital expenditure while the CIT(A) granted relief to the tune of 50% with respect to two bills of Raj Enterprises and Sai Enterprises respectively which are the subject matter of appeal before the Tribunal .The ld. Counsel drew our attention to paper book page No. 104, 105 & 106 whereby the details of all these expenses are mentioned and the invoices are placed on record. The ld. Counsel submitted that the issue is covered and these expenses be treated as normal repair expenses as the identical issue has come before the Tribunal in the case of the sister concern of the assessee firm, M/s Empress Advertising v. ITO in ITA No. 4184/Mum/2012 for the assessment year 2007-08 whereby Mumbai tribunal vide its order dated 31-07-2014(copy of the order placed in paper book at page 108-111) held as under:- "3. We have heard the arguments of both the sides and also perused th....
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....ss Advertising (supra) being sister concern of the assessee firm on identical facts and issue's in the appeal, M/s Empress Advertising v. ITO in ITA No. 4184/Mum/2012 for the assessment year 2007-08 whereby Mumbai Tribunal vide its order dated 31-07-2014(copy of the order placed in paper book at page 108-111) held as under:- "3. We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, the assessee was having 15 hoardings installed in the city during the course of its business of outdoor advertisement and total income of about Rs. 88 lacs was generated from this activity giving a net profit of about Rs. 18 lacs as shown by the assessee in the P&L account. These hoardings were required to be maintained by the assessee and in order to avoid corrosion of the structure and other adverse weathering effects, application of red oxide and painting was regularly required to be done. Similarly, cementing and plastering of foundation was also required to be done regularly in order to maintain the hoarding structures. Keeping in view the nature of business activity carried on by the asses....