TaxTMI 
TaxTMI 
2018 (9) TMI 1313
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the A.Y. 2010-11 on 27.09.2010 declaring a loss of Rs. 91,32,94,819/ - for the AY 2010-11. The case was selected for scrutiny and the assessment was completed u/s.143(3) on 13.03.2013, determining the loss at Rs. 91,31,88,142/-. The CIT-1, Hyderabad found that the order passed u/s.143(3) dated 13.03.2013 was erroneous and prejudicial to the interests of revenue. The CIT-1, Hyderabad passed an order u/s.263 dated 16.12.2014, setting aside the order of the Assessing Officer. The Assessing Officer completed the assessment u/s.143(3) r.w.s.263 on 29.01.2016 by making addition of Rs. 3,51,40,716/- towards write off of rent deposits. 2.1 During the assessment proceedings, Assessing Officer issued notices u/s.143(2) and u/s.142(1) calling for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....off of rental deposit cannot be construed as Revenue Expenditure. The Assessing Officer relying on the decision of Hon'ble High Court in the case of CIT Vs. Triveni Engineering Industries Ltd in 343 ITR 245 disallowed write off of rent deposit amounting to Rs. 3,51,40,716/- . 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 4. Before the CIT(A), the assessee submitted that it had entered into an agreement titled "Lease Deed" with Finest Promoters Private Limited for the purposes of taking the premises "The Masterpiece" owned by Finest on lease for carrying out its business operations from the said premises. The assessee submitted that as per terms of Lease agreement, the assessee had paid Intere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erally Accepted Accounting Principles in March, 2009. The assessee submitted that M/s. Finest Promoters Pvt Ltd raised the invoices for the said rent during March, 2009 to June,2009 with applicable service tax which were accounted for by the assessee during FY 2009-10. The assessee submitted that they paid Rs. 13,19,230/- vide Cheque No.6752 dated 29.01.2012 to M/s. Finest Promoters Pvt Ltd as full and final payment of dues after adjusting the Security deposit. The assessee submitted that they had taken allowance of the security deposit appropriated towards rent payable to M/s. Finest promoters Pvt ltd for the remaining portion of lock-in-period treating it as revenue expenditure as per Section 37 of the IT Act, 1961. The assessee submitted....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... he upheld the disallowance made by the AO. 6. Aggrieved by the order of CIT(A), the assessee is in appeal before us raising the following grounds of appeal: "1. That on facts and in law order dated 25/07/2017 as passed by the Commissioner of Income- tax (Appeals) - 1 Hyderabad [in short "Ld. CIT(A) ]' affirming the order dated 29/01/2016 passed by the Assessing Officer [in short "Ld. AO"], is bad in law and void ab initio. 2. That on facts and in law the Ld. CIT(A) grossly erred in holding that the expenditure incurred by the Assessee to the tune of Rs. 3,51,40,716/- as was capital expenditure, not allowable as deduction. The Assessee craves to leave, add, amend, modify, delete and/or change all or any of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... law. In this view of the matter, the AO was right in allowing the aforesaid amount as a deduction and his action could not be called erroneous or prejudicial to the interests of revenue. 2. IBM World Trade Corporation Vs. CIT (Bombay HC), [1990] 48 Taxman 11 wherein it was held as under: "We are in agreement with Shri Dastur that the principles in this regard are laid down by the Supreme Court in its judgement in Mysore Sugar Co. Ltd.'s case (supra) that even assuming that a lease for a period of 10,15 or 20 years would amount to an advantage of enduring nature, it is not that every advantage of enduring nature would result in a capital outlay. What is required to be seen is whether the advantage of enduring nature is....