HIGH COURT OF
Roger
Enterprise (P.) Ltd.
v.
Commissioner
of Income-tax
MADAN
B. LOKUR AND S. MURALIDHAR, JJ.
IT
Reference NO. 202 of 1985
August
14, 2007
Section 37(1), read with section 32(1A) of the Income-tax Act, 1961 -
Business Expenditure - Allowability of - Whether expenditure incurred for
renovation would be revenue expenditure and section 32(1A) would not be
attracted - Held, yes
FACTS
The assessee-company had undertaken the renovation work in respect of the leased premises. The assessee had changed the mosaic flooring masaic by marble and had claimed the expenditure incurred as revenue expenditure, but same was disallowed by the department. On second appeal, the Tribunal invoked the provisions of section 32(1A) and held that expenditure incurred was of capital nature.
On reference
HELD
In the cases of CIT v. Bharat Commercial Corpn, [1997] 226
ITR 242 (Pat) and CIT v. HEDE Consultancy (P.) Ltd. [2002] 258
ITR 380/[2003] 127 Taxman 597 (Bom.) in circumstances similar to the instant case. It was held that the expenditure incurred for
renovation would be revenue expenditure and section 32(1A) would not be
attracted. Therefore, assessee was
entitled to deduction of the expenditure as business expenditure. [
CASE
REVIEW
CIT v. Bharat Commercial Corpn, [1997] 226 ITR 242 (Pat) and CIT v. HEDE Consultancy (P.) Ltd. [2002] 258 ITR 380/[2003] 127 Taxman 597 (Bom.) - Followed