TaxTMI 
TaxTMI 
2019 (6) TMI 587
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.... the case and in law, the Ld. CIT (A) has erred in deleting disallowance u/s 14A of the Act without appreciating the fact that as per CBDT Circular No.5 of 2014,it was directed that disallowance u/s.14A should be made even if the assessee did not earn any exempt income during the previous year." 2. On the facts and in the circumstances of the case and in law the Ld.CIT(A) has erred in deleting disallowance u/s.14A of the Act without appreciating the fact that the assessee itself disallowed expense u/s.14A in its return but did not compute the disallowance as per Rule 8D. 3.On the facts and in the circumstances of the case in law the Ld.CIT(A) has erred in deleting disallowance on purchase of tenancy right without appreciat....
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....sessment Year 2012-13 & 2013-14, has decided this issue in assessee's favour. 7. Upon careful consideration, we note that the issue above stands covered in favour of the assessee by the decisions as above. Hence ground no.1 stands dismissed. 8. Apropos ground no.2. On this issue, we find that the ground is misplaced it is as much as learned CIT(A) has granted the relief to the assessee excluding the amount offered by the assessee itself. 9. Apropos ground no.3. Brief, facts on this issue are as under:- During the year the assessee has paid premium of Rs. 2,50,00,000/-on lease rent. Out of which assessee claimed Rs. 50 lakhs to Brandon & Company Pvt. Ltd. (BCPL) as premium on leave and license, represent amortized amount pa....
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....d after considering the reply of the assessee, the AO disallowed payment for Tenancy right amounting to Rs. 50,00,000/-. 10. Upon assessee's appeal, Ld. CIT(A) noted that assessee submissions as under:- "1. As submitted vide submission chart filed with your Honour on 12 Oct 2017, the Appellant had paid compensation amounting to INR 25,000,000 to Brandon & Company Private Limited (Brandon') for vacating the premises occupied by them and availing the said premises on leave and license basis for a period of 60 months on the same terms at which the said premises was given by Ewart Investments Ltd ('Ewart) to Brandon, which is beneficial to the Appellant. The Appellant claimed one fifth of the said amount as revenue expenditu....
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....C/T [(1980) 124 ITR 1] wherein the Honourable Supreme Court has held as under (relevant extract reproduced): "In the first place, it/s not a universally true proposition that what may be a capital receipt in the hands of the payee must necessarily he capital expenditure in relation to the payer. The fact that a certain payment constitutes income or capital receipt in the hands of the recipient is not material in determining whether the payment is revenue or capital disbursement qua the payer..........Whether it is capital expenditure or revenue expenditure would have to he determined having regard to the nature of the transaction and other relevant factors. 6. In light of the above, the Appellant submits before your Honour....
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....isallowance of INR 5,000,000 made by the learned A 0 should be deleted. Without prejudice to above and in the alternative, the Appellant submits that in case the payment is characterized as capital one, then the depreciation should be allowed to the Appellant under section 32 of the Act. 10. Thereafter, the Ld. CIT(A) concluded as under:- "9.3 I have carefully considered the facts of the case, discussion of the AO in the assessment order, oral contentions and written submission of the assessee and material available on record. It is the submission of the appellant that it had paid compensation amounting to INR 25,000,000 to Brandon & Company Private Limited ('Brandon') for vacating the premises occupied by them ....
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.... did not belong to the assessee but the assessee got the business advantage of using modern premises at a low rent, thus, saving considerable revenue expenditure for the next 39 years, both the Tribunal as well as the High Court have rightly come to the conclusion that the expenditure should be looked upon as revenue expenditure. In view of the aforesaid facts and discussion the observations and conclusion of the AO is not found to be justifiable and accordingly the ground raised is allowed." 11. Against above order, Revenue is in appeal before us. 12. We have heard both the counsel and perused the records. The ld. Counsel of the assessee reiterated the submission made before the Ld. CIT(A). He submitted that assessee has pai....