AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 595
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowance of Rs. 42,15,041/- towards repair and maintenance of leased premises, holding that the expenditure was not genuine and alternatively disallowed by the Ld. CIT(A) by invoking the provision of Section 40(a)(ia). 2. The only issue involved here in this case is, whether the addition on renovation expenses on lease hold property is in line with the direction given by the Tribunal in the first round of proceedings. The matter was remanded back by the Tribunal after observing and holding as under:- "We have carefully considered the arguments of both the sides and perused the material placed before us. The only dispute in this appeal is with regard to the allowability of expenditure incurred on the repair of the leasehold proper....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nses involving laying down/reinforcing of flooring, temporary partition, roofing and wall covering etc. In the original assessment proceedings passed u/s.143(3) vide order dated 24.12.2009, Assessing Officer has disallowed the entire repair and renovation expenses of Rs. 42,15,041/- holding it to be capital expenditure. 4. Before the Ld. CIT (A) in the first round, the assessee has filed copies of lease deed in respect of lease premises as additional evidence and remand report was called for. The Assessing Officer had objected for admission of additional evidences. Ld. CIT (A) refused to admit the said additional evidences and dismissed the appeal of the assessee. In second appeal, the Tribunal vide order dated 29th December, 2011 in ITA....
X X X X Extracts X X X X
X X X X Extracts X X X X
....itional evidences before the Ld. CIT (A) which was duly forwarded to the Assessing Officer for comments. Once the lease deeds were not admitted by the Ld. CIT (A), the Tribunal has restored this issue only to examine, whether the repair and renovation expenses are capital or revenue in nature and to consider the lease deeds filed. Thus, he submitted that it was not open to the Assessing Officer or Ld. CIT(A) to undertake any exparte inquiries behind the back of the assessee to doubt even the genuineness of the expenses. He submitted that even if it was held that the expenditure incurred was capital in nature, the assessee was still entitled for depreciation and now assessee cannot be worse off position after the matter is remanded by the Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITR 52 (Del)- CIT vs Ayesha Hospitals (P) Ltd: 292 ITR 266 (Mad) CIT vs Dr. A.M. Singhvi: 302 ITR 26 (Raj) Kanpur Dyeing & Printing Co vs CIT: 76 ITR 686 (All) Thiru Arooran Sugars Ltd. vs DCT: 350 ITR 324 (Mad) 6. Regarding non deduction of TDS, he submitted that, firstly, provision of Section 40(a)(ia) is not applicable in the present case, because major expenditure is towards purchase of material and only small portion relates to labour charges, and therefore, TDS cannot be deducted qua the material purchased. 7. On the other hand, ld. DR strongly relied upon the order of the Ld. CIT (A) and submitted that there is no enhancement of income albeit the expenditure which was disallowed on the first ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, denied doing any work for assessee and notices to other contractors remained unserved. Now based on this inquiry conducted behind the back of the assessee and without confronting the same, adverse inference has been drawn and entire renovation and expenses have been disallowed. First of all, such an inquiry was not called for, as it was beyond the scope of second round of proceedings and any inquiry conducted behind the back of the assessee after a gap of seven years, same cannot be used to draw any adverse inference, especially when assessee has produced the entire bills and invoices raised by the same contractors and after a gap of substantial time of seven years an ex-parte statement given behind the back of the assessee has no credib....