TaxTMI 
TaxTMI 
2006 (5) TMI 508
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....lated leave to the credit of the employees at the end of each year. During the course of assessment proceedings, the assessee was asked to file the details regarding the liability of leave encashment and vide its letter dated 26.11.1999 the assessee submitted as under : "In response to point No. 13 of your notice, we would like to submit that in the Financial Year relevant to the A.Y 1997-98, the company had calculated the leave encashment liability at Rs. 1,54,67,861. This accrued liability was calculated on the basis of actual accumulated leave to the credit of the employees at the year end. In the subsequent years, the company has been adjusting the actual payments/settlements against this amount set apart." The Assessing Officer found that the assessee has maintained the accounts on mercantile system of accounting and the provision for leave encashment, according to the Assessing Officer, was only contingent liability. The CIT(A) endorsed the findings of the Assessing Officer in paragraph 11 of the impugned order. 3. The contention of the assessee before us is that the issue is directly covered in its favour by the decision of the Hon'ble Supreme Court in Bharat Ea....
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....ivelage Dept. 6. Salasar Cont. Co. 20.1.97 8,86,694 Towards addition and alteration furniture work done at SM annex bldg. 7. Salasar Cont. Co. 6.2.97 4,50,464 Interior work done at Operation Office enclosure 8. Salasar Cont. Co. 19.2.97 3,48,586 Interior work done at Cabin appearance at Santacruz 9. Salasar Cont. Co. 31.3.97 96,501 Interior work done at Express check in counter at Santacruz 10. Nirmala Furnishers 28.9.96 2282,057 Towards renovation of inflight office At old dispatch office S'cruz. 11. Nirmala Furnishers 12.12.96 2,43,568 Towards interior work done at S'cruz airport 12. Nirmala Furnishers 29.3.97 1,27,500 Towards erection of decorative backdrop pannel 13. Nirmala Furnishers 31.3.97 2,30,748 Towards interior work carried out IDC APT Office 14. Nirmala Furnishers 31.3.97 7,19,899 Towards interior work carried out at check in counter and back up office at IXU APT (Pur of chairs cost of Conveyance etc) 15. Nirmala Furnishers 1.1.97 5,92,468 Towards interior work done at check in counter at PNQ APT. 16. MAC Pr....
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....g the decision of the Supreme Court and also the Jurisdictional High Court cited supra, has accepted the claim of the assessee. Following the same reasoning, we accept the claim of the assessee. The assessee is not the owner of any of these assets and the expenses are only to give a better working atmosphere to its employees and also to give an aesthetic look to its customers. Therefore, the expenditure in question is purely revenue in nature and is directed to be allowed. The depreciation granted by the Assessing Officer on these assets in the year under consideration as also in the subsequent years is directed to be withdrawn. 8. We shall now take up the departmental appeal for AY. 1997-98 in 1TA No.4087/M/2000. The major set of grievance in this appeal relates to the disallowance of aircraft redelivery charges, heavy maintenance expenses and major engine repairs. To appreciate these issues, it is necessary for us to understand the nature of the assessee's business. The assessee is engaged in the business of air taxi operations. Most of the aircraft operated by the assessee were taken on lease from various parties. The lease agreements provide that on termination of the le....
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....ting guideline on maintenance costs' which provides that heavy maintenance costs should be expressed on a basis that ensures that the charge to the profit and loss account is matched with the associated revenue. The expenditure accounted for in the F.Y. 1996-97 relevant to assessment year 1997-98 is calculated on the basis of the expenditure relating to that year. Thus it is an ascertained liability on the basis of actual calculation but payable at the end of 7 years." Further there was also a change in the method of accounting for the major engine repairs. The assessee was spreading the major engine repairs over a period of one year and from the current year the company has started accounting for engine repairs on the basis of provisions made and in regard to the flight hours actually flown during the year. As a result of the change, the charge to the profit and loss account for the year under consideration was higher to the extent of Rs. 14,92,42,952 The assessee explained that keeping in view the International Air Transport Association (1ATA) guidelines relating to accounting for maintenance costs, recommendation from engine repair agency and historical engine repair e....
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....tional control of the aircraft and to use the aircraft in accordance with the Laws and Regulations of any governmental authority. As per Article 7.2 the lessee is required to pay all costs incurred in the operation of the aircraft including but not limited to flight cruise, cabin personnel, fuel, oil lubricants, maintenance, insurance, landing fees, airport charges, passenger services and all other expenses necessary for the operation of the aircraft. As per Article 7.6 it is the sole obligation of the lessee to maintain and repair the aircraft and all of its component parts throughout the lease term and until the aircraft is returned to the lessor. On the basis of the above terms in the lease agreements, the Assessing Officer proceeded to make the disallowance by giving the following reasons. "From the above, it is clear that the lease agreement stipulates all the maintenance cost of the aircraft are to be born by the lessee during the subsistence of lease. Moreover, the return of aircraft as per Article-12 depends on a contingency of expiration or termination of the Lease Term, in the event of default of" Lessee, the Lessor has the incur at the end of the lease period and at t....
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..... Moreover, the IATA, guidelines on accountancy cannot determine whether a particular expenditure is allowable on the basis of provision. Hence, there is no merit in the argument of the assessee and the expenditure on heavy maintenance is allowed as and when it is incurred. Coming to the major engine repair expenses, the assessee during the year incurred an amount of Rs. 14,55,92,692/- and provided an amount of Rs. 14,92,42,952/-. The total debit in books was about Rs. 29748,35,644/-The assessee's main argument is that the expenditure was provided based on the expert opinion at the rate of USD 170 per flight hour. Section 31 of the IT. Act. 1961 deals with repairs and insurance of machinery, plant and furniture which reads as under. "In respect of repairs and insurance of machinery, plant or furniture used for the purposes of the business or profession, the following deduction shall be allowed" (i) the amount paid on account of current repairs thereto;" The section is clear about when the particular expenditure is allowed. The expenditure on current repairs is allowed when it was incurred. It cannot be allowed as an expenditure on the basis of future contingency or ....
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....spected after flying certain hours as per the specifications laid down by the DGCA and lessor of the aircraft. (iv) In respect of leased aircraft/engine, the lease agreements stipulate that, whilst the aircraft is with lessee, the complete maintenance. Further, the lease agreements also stipulate that the guiding factor in respect of maintenance will be in accordance with manufactures Maintenance Planning Documents (MPD), which normally spells out the time or number of cycles after which the airframe/engines and equipments are due for servicing and/or life restoration. (v) The DGCA and the lessor of the aircraft also lay down a mandatory periodic check called "C Check" which is annual maintenance procedure. (vi) The DGCA and the lessor of the aircraft also specify that all the aircrafts mandatorily undergo a through maintenance check which is known as "D Check" which is normally done after the aircraft is flown 2400 hours. (vii) The leased aircrafts have to be returned to the lessor on the Termination of the lease on the specified conditions which can be said in away that aircraft is fit in every respect on a specified airfield mutually agreed." The assessee further ....
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....entral Government. The so-called clarifications in the balance-sheet are nothing but mandatory compliance of such provisions. The change in the method of accounting was only the result of these compliances and cannot be subjected to any disallowance merely on the basis of change in the accounting method. The assessee pleaded that such change in method of accounting' was bona fide and such changed method was regularly followed thereafter. The assessee relied upon the following case laws in support of its claim. "1. Sarupchand vs. CIT - 4 ITR 420 (Bom.) 2. CIT vs. West Const paper Mills Ltd - 193 ITR 349 (Bom ) 3. CIT vs. Destiny Inv. P. Ltd. - 218 ITR 232 (M.P.) 4. CIT vs. Dolaguri Ten Company Ltd - 76 Taxman 257 (Cal.) 5. Karnataka State Forest Industries Corporation Ltd. vs. CIT - 201 ITR 674 (Bang.) 6. CIT vs. Delta Plantations Ltd. vs. CIT - 114 CTR 271 (Cal) 7. Indian Molases Co. (P) Ltd. vs. CIT- 37 ITR 66 (SC) 8. CIT vs. Indian Metallurgical Corporation - 51 ITR 240 (Mad.) 9. CIT vs. Swadeshi and Flour Mills Ltd. - 53 ITR 134 (SC) 10. Standard Mills Company Ltd. vs. CIT - 229 ITR 366 (Bom) 11. CIT vs. Krishnaswami Murlidhar - 531 ITR 122 (....
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....actual obligation to undertake this inspection and pay this amount. Just because the liability for heavy maintenance cost secured during the assessment year under review but would be paid in future cannot be the basis for disallowance of appellant's claim. Major Engine Repairs The aircraft engine requires major repairs at periodic intervals. The appellant company had appointed M/s Greenwich Caledonian, an organisation of international repute holding expertise in respect of aircraft maintenance. After examining the flight schedule/time table of the appellant company, past experience of the appellant company and the weather conditions in India it had recommended that the appellant company should secure the expenses in respect of major engine repairs at the rate of US$ 170 per flight hour. Accordingly, based on the actual flight hours the appellant company had made provision of Rs. 29,48,35,644/- for the assessment year under review. Out of this, Rs. 14,55,92,692/- was paid within that year itself and the balance was paid in subsequent five to six months. The A.O. had disallowed the claim of the appellant company stating that the liability is of a contingent nature since the....
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....d the scientific method of accounting by proportionately claiming the contractual liability under the lease agreement over the period of the lease. The agreement between the appellant company and (he lessor has not been challenged by the A.O, Further;" the liability on account of the redelivery of the aircrafts is definite and certain. The fact that the aircraft will go back to the lessor at the end of the lease term is also mentioned in the agreement and not challenged by the A.O. Further the company has liability on account of redelivery expenses has also been accepted by the A.O. and same has been mentioned in the assessment order," 10. The learned CIT(A) after going through the several contentions of the assessee and examining the nature of these expenses and also the strict control exercised in the industry by the Civil Aviation Ministry, the manufactures of aircraft and IATA and having regard to the uniform accounting policy adopted in the airline industry, found that the claim of the assessee deserves to be accepted and the disallowance made by the Assessing Officer was not justified. He did not agree that the claim of the expenses in question was contingent in nature but....
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.... liability towards the expenditure which are definitely to be arising in future. Any provision based on estimate cannot be allowed as a deduction according to the clear provisions of law. The Assessing Officer, the learned Standing Counsel for the department submitted, has given elaborate reasons why such expenditure cannot be allowed as deduction. The assessee's method of accounting in respect of the different items of expenditure cannot be to suit its convenience. It has to follow the accepted norms of accounting The assessee's departure from the existing method, according to the learned standing counsel, is not bona fide and should not be accepted, although the same is regularly followed in the subsequent years. 12. The learned counsel for the assessee, on the other hand, strongly relied upon the discussions in the order of the CIT(A). According to him, the learned CIT(A) has properly appreciated the ground realities of the assessee's business and also the accounting policies required to be followed by the assessee having regard to the guidelines issued by IATA. He pointed out that the Assessing Officer has taken too a narrow view of the matter without appreciatin....
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....y of the Airline Accounting Guidelines for maintenance issued by IATA in association with KPMG is placed at pages 113 to 120 of the paper-book. The assessee has also provided in the paper-book details of the provisions made and the actual expenses incurred so as to show that there has been a short provision on most of the items, which has been properly appreciated by the learned CIT(A) in deleting the disallowances. The learned counsel further pointed out that the learned CIT(A) has discussed all these important material to support the relief granted by him. According to the learned counsel, the order of the CIT(A) requires to be confirmed on the basis of the case laws discussed by him. 13. We have carefully considered the rival contentions and have gone through the orders of the authorities below and also the voluminous material placed by the assessee in the paper-books. The learned CIT(A) has dealt with all the issues in detail and has properly appreciated the assessee's nature of business. The assessee is in the business of airline operations, which is highly regulated by several authorities for the purpose of flying public. Considering the sensitiveness of the business i....
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....d obligations are not bona fide and the assessee after fallen in line with these prescriptions has followed from year to year basis on the same line, it only strengthens the bona fides of the assessee's claim. All require to be appreciated by the revenue authorities. By following the changed method of accounting, the assessee has not violated any of the provisions of the act. But such method has only resulted in the claim, it apparently looked exorbitant but which are not otherwise having regard to the actual expenses incurred by the assessee. The learned CIT(A) has examined the actual expenses incurred by the assessee on some of the aircraft which only shows that even after the change in the method of accounting there has been a short provision in the books of account. In the light of these facts it cannot be said that the claims of the assessee are only contingent in nature and are not the accrued liabilities. In fact, in the nature of the assessee's business the assessee has to incur these expenses. The only uncertainly is the actual time of the expenditure But the expenditure itself has to be incurred because of the flying hours completed. Even the quantum of the expend....
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....f option to acquire the aircraft. In the light of above facts and circumstances, the terms of agreement of the hire purchase do not appear to be a simple hire purchase agreement regarded as "sale" that gives the purchaser the facility of paying the price by installments. The terms of agreement of hire purchase in the present case is a complicated one and the owner had all the rights including the right of "ownership" over the aircraft through out the period of hire. As mentioned earlier, even the option given to the hirer to purchase the aircraft at the end of the hire period was not absolute and beset with so many conditions and in the event of any eventually stipulated in the agreement the hirer may stand to loose the right of "option" to purchase the aircraft." The Assessing Officer concluded that inasmuch as the title of the property vests with the hirer only after exercising option to purchase the asset by fulfilling all the conditions mentioned in the agreement, till such time the ownership of the asset in question remains with the owner and the assessee cannot be considered an owner and no depreciation can be granted on these assets. The learned CIT(A) however, was of ....
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.... purchased on hire purchase basis. Further a copy of the certificate of initial value from ANZ Grindlays Export Finance for aircrafts taken on hire purchase basis is also enclosed at page 200 of the paper-book. 16. We have carefully considered the rival contentions and have gone through the impugned orders. The order of the learned CIT(A), in our view, does not require any interference. The learned CIT(A) has properly appreciated the nature of hire purchase transactions and the generality of the hire purchase agreement. Clause 30 of the hire purchase agreement, which is the basis for disallowing the assessee's claim in the hands of the Assessing Officer, has been properly dealt with by the CIT(A). We agree with the view of the CIT(A) that the conditions laid down in the said clause 30 are nothing but more than the routine formalities that are to be performed by the hirer. Such terms and conditions are usually part and parcel of every hire purchase agreement. To avoid these controversies the Board has issued circulars from time to time enabling the hirer to claim depreciation on assets acquired under what is known as hire purchase agreements. The Madras High Court in the case....
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....ion made by him u/s 37(4) of the Act." 18. We have heard the learned standing counsel for the department, who strongly supported the findings of the Assessing Officer and in the light of the Bombay High Court decision in the case of Ocean Carriers P. Ltd. (211 ITR 357) and also the decision of the Madhya Pradesh High Court in the case of National Newsprint and Paper Mills Ltd. v. CIT (234 ITR 729) wrongly mentioned in the assessment order as Raja Bahadur Motilal Mills Ltd. The learned counsel for the assessee, on the other hand, pointed out that these are not expenditure on the maintenance of guest-house. These are business expenses incurred for providing accommodation to assessee's employees in hotel where it could not provide residential accommodation to them in the beginning of its business. We find that identical issue came up before the Tribunal in the assessee's own case for A.Y. 194-95 in ITA No.2037/Mum/99 wherein the Tribunal has accepted the contentions of the assessee. Facts and circumstances being similar, for the reasons mentioned in our abovementioned order in the assessee's own case, we decline to interfere with the order of the CIT(A) on this issue. A....
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....that after the amendment of section 43B all the payments towards employees as well as employers contribution to provident fund etc., made after the close of the accounting period, but before the due date of filing the return are admissible as deduction. Facts and circumstances being similar as also following the decisions cited before, and relied upon by, the CIT(A) we uphold the order of the CIT(A) on this issue. 22. We shall now take up the departmental appeals for A.Ys. 1998-99 to 2001-02 in ITA. Nos. 3691/M/02, 3201/M/03, 6084/M/03 and 7390/M/04. The first common grounds in all these appeals viz., disallowance of aircraft redelivery charges, heavy maintenance expenses, major engine repairs and depreciation on aircrafts taken on hire purchase basis, are the same as dealt with by us above for the A.Y. 1997-98. On the basis of the our reasoning therein, the orders of the CIT(A) on this issue for the years under consideration are confirmed. 23. The only remaining dispute for departmental appeal for A.Y. 1998-99 relates to disallowance of lease rent u/s. 40(a)(i) for non deduction of tax at source amounting to Rs. 14,00,92,734. The assessee had paid lease rental to M/s. Mercur....
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....erson who is anon-resident, includes all income form whatever source derived which. (a) is received or deemed to be received in India in such year, by or on behalf of such person or (b) accrues or arises or is deemed to accrues or arise to him in India during such year". Further section 9 describes the instances of Income deemed to accrue or arise in India. The provisions of this Section 9(1) relevant to the present case are reproduced as under: "The following income shall be deemed to accrue or arise in India". (i) All income accruing or arising whether directly or indirectly through or form any business connection in India or through or from any property in India or through or from any asset or source of income in India or through the transfer of a capital asset situate in India." It is stated that in the assessee's case there exist a business connection between a Mercurbak, Austria (Lessor) and assessee and the income arises from the transfer in the form of leasing of capital asset (aircraft) situate in India and therefore, by virtue of the provisions of Section 9(1)(i), the lease rental income is taxable in India. The taxability of such lease rental income....
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....in position to the detriment of the assessee. In view of the above, it is submitted that the very invocation of section 40(a)(i) is incorrect and therefore the above addition of Rs. 14,00,92,734 is unsustainable." The CIT(A) considered the issue in the following manner: 13.19 I have considered the Assessing Officer's reasoning as well as the appellant's submissions. It is not in dispute that. The assessee made an application seeking authorization for payment to Mercurbank, Aktiengesellashaft, Austria u/s. 195(1) of the Income-tax Act 1961 Act)]. The A.O. vide his order dated 17.10.1997 authorised the payment of the fixed monthly rental charge of US$ 340 per flown hour based on actual utilisation of Aircraft without deduction of tax at source. Accordingly, remittance of Rs. 7,32,92,084/- and Rs. 6,68,00,650/- was made to Mercurbank, Aktiengesellschaft, Austria without deduction of tax at source. I find that Assessing Officer has faulted the appellant for not deducting tax at source. According to me, this is not justified action on the part of the AO, when on authorized/competent officer has authorized the payment of fixed monthly rental charge and variable monthly r....
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....e-tax Act, 1961 13.23 I find that the A.O. has not taken into account the relevant provisions of the DTAA between India and Austria. An analysts of the relevant articles of the DTAA (supra) shows that under the treaty the income earned by the Austrian company would not fall under articles 6 dealing with royalties but would fall under article 3 (supra) dealing with the business profits. Accordingly in the circumstances of the case would be taxable in Austria. 13.24 fn view of the foregoing, I am of the view that the A.O. was not justified in holding that the lease rental payment is covered under any "other sums" which is chargeable to tax under section 5(2) and 9(1) of the Act and the case is hit be the provisions of section 40(a)(i)." 25. We have heard the learned standing counsel for the department, who strongly supported the findings of the Assessing Officer, and also the learned counsel for the assessee who strongly relied upon the discussions in the order of the CIT(A). Our attention was also invited to pages 92 to 97 of the paper-book containing the assessee's application for seeking authorization for payment to non-resident u/s. 195(2) and authorization dated 17.....
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....rogramme was relaunched as Jet Privilege (JP) Programme. The highlights of the scheme are as follows: - A passenger can apply for membership after his first flight by filling up an application form. He will then be issued a Blue Card. To become a Silver Card holder the passenger in required to collect a minimum of 30,000 miles to his credit or complete 30 flights in one financial year whichever is earlier. To become a Gold Card holder the passenger is required to collect a minimum of 60,000 miles to his credit or complete 60 flights in one financial year whichever is earlier. A passenger is eligible to redeem his miles after collecting a minimum of 10,000 miles or completing 10 flights whichever is earlier. Any redemption of this accumulated mileage in the subsequent years is debited to this provision account. To track the miles earned by each member, a member is required to mention his JP membership numbers at the time of making a booking or at the time of checking in for a flight. Based on this information available in the system, the miles arc then updated in each member's account. The cost of the unutilized mileage lying to the credit of the passengers is then p....
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....000) a deduction should be allowed though the liability may have been estimated and discharged at a later date. Coming to jurisdictional High Court of Mumbai, it was held in the case of Indian United Mills Ltd v. CIT (1975) 98 ITR 426 that such a liability is an ascertainable liability in praesenti though payable in future. It is also submitted that if the liability to a particular sum has been incurred during the accounting period and if otherwise the sum is allowable as a revenue expense, then whether the sum has been actually paid or not is immaterial; the liability so incurred has got to be allowed as revenue expenditure. This view is confirmed by the Hon'ble Supreme Court in the case of Haji Lal Mohd. Bin Works v. CIT (1997) 224 ITR 591, PP 594. It is submitted that applying the test laid down in the above cases, it can be seen that the assessee has satisfied all the conditions prescribed in those case and prescribed by the Institute of Chartered Accountant as well." The assessee's claim was not accepted by the Assessing Officer for the following reasons: "i. The frequent flyer programme expenses is a provision made in the books of account of the assessee. The....
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.... which was the issued cost worked out by following strict principles of accountancy has to be allowed." 28. The revenue is aggrieved. The learned Standing Counsel for the department vehemently argued that the deduction claimed by the assessee is in respect of a liability that may arise in future, which is purely contingent in nature and such contingent liability, according to the learned Standing Counsel, cannot be subjected to deduction under the provisions of the 1 T Act. It was vehemently argued that the order of the CIT(A) in so far as it allows the assessee's claim is incorrect and the order of the Assessing Officer required to be restored. The learned counsel for the assessee, on the other hand, on our instance, filed several details. He has filed at page 186 of the Paper Book the working of the provision for frequent flyer programme for assessment year 1999-2000 and similar working at pages 187 for assessment year 2000-01 and at page 188 for assessment year 2001-02: He has also provided the workings at page 189 of the Paper Book. During the course of hearing, we have called for the programme details of what is known as "Jet Privilege Members Guide". The entire prog....
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....r credit The can accumulate miles equivalent to the extent of distance travelled. There is a condition to this facility in order to be admitted as a member into this programme. A passenger would have to fly minimum 14 flights in 3 consecutive months. A passenger can apply for membership after his first flight by filling up an application form. He will then be issued a Blue Card To become a Siler Card holder the passenger is required to collect a minimum of 30,000 miles to his credit or complete 30 flights in one financial year whichever is earlier To become a Gold Card holder the passenger is required to collect a minimum of 60,000 miles to his credit or complete 60 flights in one financial year whichever is earlier A passenger is eligible to redeem his miles after collecting a minimum of 10,000 miles or completing ten flights whichever is earlier. Any redemption of the accumulated mileage in the subsequent years is debited to the provision account. To track the miles earned by each member, a member is required to mention his 'JP Membership Number" at the time of making booking or at the time of checking in for a flight Based on this information available in the system, the mil....
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.... such inventory is made to take into consideration the effluxion of time. It is made taking into consideration the estimated useful life of the aircraft. The estimated, useful life is derived from Schedule XIV of the Companies Act. The company on the opening stock of such reusable stock makes a provision @ 5.6% On every addition during the year the company applies a rate of 2.8%. The policy so followed is consistent with internationally accepted accounting practice in accordance with the industry, Audit Guide prepared by The Civil Aeronautics Subcommittee including Statement of position issued by The Accounting Standards Division" The Assessing Officer considered the above explanation and found it to be untenable. According to him, it is just a provision based on the estimated usual life of the aircraft These provisions are not the actual expenditure, but based on the estimated life span of the aircraft and the spare parts. Such provision at 5.6% per annum, according to him was not any actual write off of obsolete spares during the year According to the Assessing Officer, such a claim towards the liability was contingent in nature and depended on future probabilities. The obs....
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....he assessee is based on a scientific basis approved under the Companies Act, 1956 and the International Accounting Standard applicable to aircraft industry and it is definitely an allowable expenditure as the same was laid out or expenditure for the purposes of assessee's business The assessee has also filed all the relevant information at paged 192 to 206 of the Paper Book for the assessment year 1998-99. Further reliance was placed on the following decisions; a) CIT vs, Mahalaxmai Textile Mills Ltd. (66 ITR 710) b) Kedarnath Jute Mfg Co. Ltd vs CIT ( 82 ITR 363 - SC) c) Jute Corporation of India Ltd vs. CIT (187 ITR 688 - SC) Similar details are filed for every subsequent assessment years To maintain brevity, we shall take the facts for the assessment year 1998-99 and dispose of the issue for other assessment years on the basis of this uniform facts. 33. We have heard both the sides and considered their rival submissions and have also gone through the record. In our view, the contentions of the assessee deserve to be accepted in the light of the International Accounting Standard applicable aeronautic industries The departmental authorities should have appreciat....
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....nature and is directed to be allowed with a further direction to withdraw the depreciation, if any, granted. With similar directions, this issue for the four years under consideration is disposed off 36 The only remaining ground in the assessed appeal for AY. 1998-99 relates to the disallowance of consultancy fees paid These are the consultancy fees paid to architects, whose services were used in interior designing, The expenditure on interior designing is already a part of repairs and maintenance of furniture The assessee has furnished details of these expenses along with bills at pages 214 to 221 of the paper-book We have gone through the same and find that none of these expenses are in connection with acquisition of any capital asset We have already held that the expenses on repairs and renovations of furniture and fixtures as revenue in nature. The fees paid for getting certain professional advice in the matter are therefore similarly treated as revenue expenditure. This ground of the assessee is therefore allowed. 37. The next common dispute in the assessee's appeal for A.Y. 1999-2000 to 2001-02 relates to the action of the Assessing Officer in treating the interest inc....