1984 (3) TMI 49

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....651 spent on renovation, addition, alterations, etc., to the furniture, fittings, etc., was allowable as revenue expenditure ? " The assessee, a registered firm, is a tenant of a cinema theatre. During the year ending March 31, 1975, the firm renovated the theatre and incurred expenses such as the following :                                            Rs.  " Furniture polishing materials, etc.    2,449.50    Chair brackets            ....

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....ference to this court. The point that arises for consideration is, whether the expenditure incurred by the assessee on renovation, addition, alterations to the furniture, fittings, etc., of the cinema theatre, was rightly allowed as revenue expenditure. Form the nature of the expenditure that the assessee had to incur towards effecting repairs to the ceiling and repairs and polishing of the furniture, etc., it is obvious that the assessee, who was running cinema shows in the theatre as a tenant, had to preserve and maintain the theatre in a fit condition and make it more attractive and comfortable. The Tribunal's finding is that the assessee incurred the said expenses in the course of its business and it was a necessary expenditure. ....

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....lied, the conclusion is inevitable that what was spent by the assessee was only to run his business more efficiently or more profitably leaving the fixed assets untouched. The amount spent on repairs or on so-called renovation cannot, therefore, be considered as capital expenditure. Our view also finds support from the decision of the Madras High Court in CIT v. Dasaprakash [1978] 114 ITR 210, in which the facts of the case lie in close parallel with the facts of the present case. Similar was the view taken by the Allahabad High Court in Kanpur Dyeing & Printing Co. v. CIT [1970] 75 ITR 686. Coming nearer home, this court in Hanuman Motor Service v. CIT [1967] 66 ITR 88 (Mys), held that the expenditure incurred by the assessee therein fo....