2022 (11) TMI 374

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....ed 23.03.2021. The assessment was framed by the Assistant Commissioner of Income Tax, Corporate Circle-2, Coimbatore for the Assessment Year 2013 - 2014, u/s.143(3) r.w.s.92CA(3) of the Income Tax Act, 1961 (hereinafter "the Act") vide order dated 16.12.2016. 2. At the outset, it is noticed that this appeal of the Assessee is time barred by limitation by 16 days. It is noticed from the affidavit filed by the Assessee that the appeal documents were delivered at the Office of the Income Tax Appellate Tribunal on 19.05.2021 by Speed Post but was not considered as filed on 19.05.2021, due to the lockdown imposed by the Government of TN towards the outbreak of 'Covid-19' pandemic during the period. However, the lockdown was partially relax....

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....ves enduring benefit. 5. The Assessing Officer, however was not satisfied with the explanation furnished by the Assessee, but was of the view that the expenditure incurred under the head "Furniture Maintenance" is not in the nature of temporary repairs but it is a capital expenditure which gives enduring benefit and thus, rejected the arguments of the Assessee and made an addition towards the said expenditure after allowing depreciation at the rate of 5%. 6. Being aggrieved by the Assessment Order, the Assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Assessee reiterated its submissions made before the Assessing Officer and contended that the expenditure incurred for renovation of the leased premises ca....

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....ed the benefit of depreciation. Section 32 of the Act provides for Depreciation to compensate for the wear and tear of the assets owned and used by an Assessee for the purpose of its business. Section 37(1) of the Act provides for deduction of revenue expenditure incurred wholly and exclusively for the purpose of business. 10.2 I am of the view that the afore-mentioned expenditure incurred by the Appellant at the premises that was taken on lease in order to make such rented space fit for operational use by the Appellant for its business is capital expenditure; the Appellant's nomenclature to couch such expenditure as renovation works is misleading; that the internal work that has been carried and that majority of expenditure was ma....

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....ve explanation inserted in the statute with effect from 01.04.1988. The expenditures have been incurred in such rented premises; and such expenditures have been incurred by the Appellant in such premises gives enduring benefits to the Appellant. The impugned expenditures were, it is clear, not incurred for carrying out any repair works nor were they incurred for undertaking maintenance work. Hence, the Assessing Officer has correctly held the impugned expenditure as Capital Expenditure and consequently no interference is called for in the Assessing Officer's conclusion. 10.5 The ratio in the case of the Ooty Dasaprakash (supra) is not applicable to the facts of the Appellant's case, for the issue in the said case was about replacem....

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....ation software. Per contra, the Appellant has executed works in order to aid its business growth and the same endures enduring benefit to the Appellant. 10.6 In totality of the facts of the case and in view of the foregoing discussions, I am of the view that no interference is called for in the Assessing Officer's action. Accordingly, the Appellant's grounds connected to the issue of capitalization of furniture expenditure are dismissed." 7. The learned Authorized Representative for the Assessee referred to a plethora of judicial proceedings including the decision of the Jurisdictional High Court of Madras in the case of the Commissioner of Income Tax-I, Chennai Vs. Armour Consultants Private Limited reported in [2013] 355 ITR 4....

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.... enough materials including certain judicial proceedings to justify its case, where the Hon'ble High Court of Madras in case of Commissioner of Income Tax-I, Chennai Vs. Armour Consultants Private Limited (supra) had considered very similar nature of expenditure like partitions, vinyl flooring and interior decorations for leased premises and held that the said expenditure incurred to make the lease premises workable and functional is revenue in nature. 11. ITAT, Chennai in the case of Redington (India) Limited Vs. Additional Commissioner of Income Tax reported in [2015] 41 ITR (Trib.) 646 (Chennai) held that office cabins, wooden partitions, plastering, water proofing treatment, installation charges, flooring charges, etc for leased prem....