TaxTMI 
TaxTMI 
2016 (6) TMI 1266
X X X X Extracts X X X X
X X X X Extracts X X X X
....e common in nature, these appeals are clubbed together, heard together, disposed off by this common order for the sake of convenience. 2. The common ground in all these three appeals is that the CIT(A) erred in holding that the expenditure incurred on temporary wooden structures are allowable as revenue expenditure. 3. The facts of the case are that the assessee is a retailer of ready made gaments in the name of M/s.Vaishnavis, M/s.Narayans, M/s.Vinayas, M/s.Viswarags and has taken several buildings on lease for setting up of retail garment showrooms. The assessee carried out renovation, repairs at the leased premises. The assessee claimed 100% depreciation on temporary wooden structures for the various assessment years under consideratio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....materials to be used for the works, are to be as specific by the IDC approved by the Company. d) On successful completion of the showroom in accordance with designs and materials approved by Titan you will enter into a Franchise agreement with us." As far as Addidas, is concerned, the terms are as follows: "2. The Image of the Brand Store. Furniture and Equipment 2. 1 The Franchisee shall structure, decorate and equip the interior and exterior of the Brand Store in conformity with the adidas (r)design specifications (as communicated from time to time to the Franchisee) and in accordance with the plans previously submitted to and approved by a-India and utilizing the services of designers, supervisors and contractors previously nomina....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urbishment work deemed necessary by a-India so as to comply with the latest adidas (r) design and image." Further, Ld.CIT(A) observed that in order to bring into existence the showroom of a particular brand, the assessee has carried out certain specific interior works involving the interiors, furniture, and equipment of the premises. The assessee has taken on lease the said premises and carried out the interior decoration work, in line with the specification of the brand whose products are then sold by the appellant as a retailer/franchisee, depending on whether it is MBO or EBO. 3.2 Ld.CIT(A) discussed many judicial pronouncements in his order in support of allowing depreciation @ 100% on such interior works. Further, CIT(A) explaned t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l construction, fabrication works. Both the appellate authorities had pointed out that the assessee-company was required to incur such expenditure for providing partitions, vinyl flooring and the interior decoration in order to provide business ambience and achieve functional utility. The Commissioner of Income-tax (Appeals) had specifically pointed out that the expenditure made by the assessee to make the premises more useful and enhance its functional utility will not come under the purview of capital expenditure and by following the decision of this court reported in CIT v. Sanco Trans Ltd. [2006] 284 ITR 51 (Mad) the Commissioner (Appeals) found that those expenditures are to be allowed only as a revenue expenditure..." and also held th....