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| The Tax Publishers2019 TaxPub(DT) 2833 (Mad-HC) : (2019) 414 ITR 0148 : (2019) 310 CTR 0228 : (2019) 263 TAXMAN 0497 INCOME TAX ACT, 1961
Section 37(1)
Where assessee had incurred substantial expenditure towards renovation leading to enduring benefit as also towards improvement and construction of the building could not be termed as 'repairs', therefore, expenditure incurred by the assessee was of capital in nature and the same would come within the mischief of Explanation 1 to section 32(1).
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Capital or revenue expenditure - Expenditure towards additional construction and renovation for improvement of building taken on lease - -
Assessee had taken certan premises on lease and put up further additional construction and also renovated and incurred expenses for improvement of the building. AO treated the expenditure to be of capital in nature in view of Explanation 1 to section 32(1). Assessee's case was that repairs to the premises could not be capitalised in view of section 30(a)(i).Held: Assessee had incurred substantial expenditure towards renovation leading to enduring benefit. Also, assessees had incurred expenditure towards improvement and construction of the building which could not be termed as 'repairs', therefore, expenditure incurred by the assessee was of capital in nature and would come within the mischief of Explanation 1 to section 32(1).
Relied:Silver Screen Enterprises v. CIT (1972) 85 ITR 578 (P&H) : 1972 TaxPub(DT) 72 (P&H-HC), (High Court of P & H).
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2002-2003 & 2003-2004
IN THE MADRAS HIGH COURT
VINEET KOTHARI & C.V. KARTHIKEYAN, JJ.
CIT v. Viswams
Tax Case Appeal Nos. 1929 to 1937 of 2008
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