1996 (4) TMI 56

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....ench, has referred to this court for its opinion the following question : " Whether, on the facts and in the circumstances of the case, the expenditure incurred of Rs. 42,000 over the renovation charges of the show-room was capital expenditure or revenue expenditure specially in view of the provisions contained in section 32(1A) ? " This reference has been made under section 256 of the Incom....

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....t, had made certain renovation for the show-room and the rented premises did not become the property of the assessee merely by an act of renovation. The Tribunal upholding the finding of the Commissioner of Income-tax (Appeals) also held that the expenditure incurred on renovation of the rented shop was revenue expenditure. We are not quite happy with the observation made by the Tribunal except....

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....d by way of renovation or extension of, or improvement to, the building, then, in respect of depreciation of such structure or work, the following deductions shall, subject to the provisions of section 34, be allowed --- (i) such percentage on the written down value of the structure or work as may in any case or class of cases be prescribed ; (ii) in the case of any such structure or work wh....

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....(ii) ' sold ' shall have the meaning assigned to it in the Explanation to clause (iii) of sub-section (1). " On the basis of the aforesaid provision it was sought to be argued by the Revenue that the amount of Rs. 42,000 would be capital expenditure. Since there is no finding of fact that the assessee had incurred any capital expenditure by way of renovation, we hold that section 32(1A) woul....