1989 (7) TMI 38

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....of the Income tax Act, 1961, seeking a direction from this court to the Tribunal to state the case and refer the following questions of law to this court : "(1) Whether the Tribunal is justified in concluding that one-fourth of the total expenditure of Rs. 17,24,480 incurred on the rooms, bath, rooms, restaurant and other appurtenant fittings is capital expenditure and such conclusion is based ....

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....0 which it had spent, as revenue deduction. The Income-tax Officer regarded a part of the expense which had been incurred, namely, about one-fourth, as capital expenditure and disallowed the same. The assessee then went up in appeal before the Commissioner of Income-tax who upheld the said disallowance. The second appeal to the Income-tax Appellate Tribunal failed and after the dismissal of the ap....

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....e provisions of section 32(1A) are applicable. The said provision reads as under : "Where the business or profession is carried on in a building not owned by the assessee but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession after the 31st day of March, 1970, on the const....

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....with the amount of scrap value, if any, fall short of the written down value thereof; Provided that such deficiency is actually written off in the books of the assessee." It is clear from a bare perusal of the aforesaid provision that, on any expenditure which is incurred by a tenant which is in the nature of a capital expenditure, depreciation will be allowed. The said provision further ind....