TaxTMI 
TaxTMI 
2021 (1) TMI 44
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....of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12. ITA No.2756/M/2017 (Assessee's appeal) 2. The issue raised in 1st ground of appeal is against the order of Ld. CIT(A) wrongly applying the percentage criteria for disallowing the provision for expenditure amounting to Rs. 6,69,68,954/-. 3. At the outset, the Ld. Counsel of the assessee pointed out that the issue is covered in favour of the assessee by the decision of the co-ordinate bench of the Tribunal in assessee's own case in ITA No.8674/M/2011 & 5157/M/2011 & ors. A.Y. 2005-06 vide order dated 30.08.2019 wherein the identical issue has been decided in favour of the assessee by directing the AO to delete the part disallowance sustaine....
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.... perused the material on record. We have also applied our mind to the decisions relied upon. The issue before us is, whether the expenditure incurred by the assessee towards repair/renovation of leased premise is of capital or revenue nature. On a perusal of the details of expenditure incurred, as submitted in the paper book, we are of the view that by incurring such expenditure, the assessee has not brought into existence any capital asset of enduring nature. A reference to Explanation-1 to section 32(1) of the Act, would reveal that it speaks of capital expenditure incurred towards construction of any structure or renovation or extension or improvement to the building. Thus, on a reading of the aforesaid provisions, it becomes clear that ....
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....t that the issue is squarely covered in favour of the assessee in above ITA vide para No.41, 42, 43, 44 & 45 wherein the issue was restored to the file of the AO to decide the issue independently and directly in accordance with law and jurisdictional precedent afresh and if the assessee can establish the change in the revenue recognition policy is for bonafide and valid reasons, the question for any addition on this count would not arise. The Ld. Counsel submitted that the current year may also be decided by restoring the same to the file of the AO. 11. After perusing the decision of the co-ordinate bench of the Tribunal and facts of the case, we find that the issue is squarely covered in favour of the assessee vide ITA No.8674/M/2011 A.Y.....
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....in USA. It is also submitted that the new revenue recognition policy adopted by the assessee is in tune with similar policy adopted by the Head Office and which is also followed by various other reputed organizations/entities. As per section 145(1) of the Act, income chargeable under the head profits and gains of business and profession has to be computed by employing either cash or mercantile system of accounting regularly employed by the assessee. Of course, sub-section (2) of section 145 of the Act prescribes the Accounting Standards to be followed by any class of assessee or any class of income has to be notified by the Central Government. Whereas, sub- section (3) of section 145 of the Act prescribes that if the Assessing Officer is no....
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....und is allowed for statistical purpose. 13. The issue raised in 4th ground of appeal is against the confirmation of addition of dividend distribution tax of Rs. 1,23,696/-. 14. After hearing the rival contentions and perusing the materials on records we find that ld. CIT(A) has given a direction to the AO to verify the computation of dividend distribution tax after verifying the claim of the assessee from records. It appears that AO has not complied with the direction. Therefore we direct the AO to verify the claim of the assessee and compute the dividend distribution tax payable applying the correct rate of surcharge thereon. The ground is allowed for statistical purpose. 15. The issue raised in ground No.5 is against the order of Ld. C....
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....e is dismissed accordingly. 21. The issue raised in ground No.2 is against the deletion of disallowance of Rs. 18,57,627/- on account of renovation expenses for office premises. 22. We have perused the ITA No.8674/M/2011 A.Y. 2005-06 and observed that identical issue has been decided by the coITA ordinate bench of the Tribunal in favour of the assessee. The operative part is as under: "20. We have considered rival submissions and perused the material on record. We have also applied our mind to the decisions relied upon. The issue before us is, whether the expenditure incurred by the assessee towards repair/renovation of leased premise is of capital or revenue nature. On a perusal of the details of expenditure incurred, as submitted in t....