K.R.Bakes Pvt Limited, CHENNAI V. ACIT, Coimbatore

ITA 1384/CHNY/2013

• Counselvise Citation: 138421714 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-05-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 24-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR NISCHAL
• Assessee Lawyers: VIKRAM VIJAYARAGHAVAN; SAROJ KUMAR PARIDA S
• Keywords: Capital asset; Depreciation; Business expenditure; Revenue expenditure; Capital expenditure
• Section: 32; 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! ' # , $ %& BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ ITA NO. 1384/MDS/2013 / ASSESSMENT YEAR : 2009-10 M/S. K.R.BAKES PVT. LTD., NO.8/1, KPG NAGAR, GANAPATHY, COIMBATORE -641006. PAN AACCK1728L APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV(2), COIMBATORE. RESPONDENT) / APPELLANT BY : S/SHRI VIKRAM VIJAYARAGHAVAN & SAROJ KUMAR PARIDA, ADVOCATES / RESPONDENT BY : DR. NISCHAL, JCIT ! / DATE OF HEARING : 13.05.2015 '# ! / DATE OF PRONOUNCEMENT: 29.05.2015 ' / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, COIMB ATORE DATED 22.4.2013. - - ITA 1384/13 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO CONFIRMING THE DISALLOWANCE OF EXPENDITUR E AMOUNTING TO ` 20,65,165/- INCURRED ON LEASED PREMISES AT KADAVA NTHARA, ` 6,46,929/- AT ALINCHUVADU, ` 2,36,550/- AT PALARIVATTAM, COIMBATORE AS CAPITAL EXPENDITURE AGAINST THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE INC URRED EXPENDITURE FOR THE SHOW ROOM MAINTENANCE AND INTER IOR FURNISHING. AS SEEN FROM THE DETAILS FURNISHED BY THE ASSESSEE, FOR THE BRANCH AT KADAVANTHARA, THE EXPENDITURE INC URRED WAS ` 31,70,785/-. IT INCLUDES WOOD PANELLING OF THE INT ERIORS INCLUDING TEMPORARY SHEDS FOR WORKERS, NEW SHOW CASES, FALSE CEILINGS WERE DONE SINCE A NEW BRANCH WAS STARTED AT KADAVANTHARA . THE ASSESSING OFFICER TREATED THE EXPENDITURE AS CAPITA L IN NATURE. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER(APPEALS). 4. ON APPEAL, THE COMMISSIONER(APPEALS) AFTER EXAM INING THE DETAILS FURNISHED BY THE ASSESSEE AND THE ORDER OF THE AO OBSERVED THAT THE EXPENDITURE TOWARDS RODS, PIPES , ANGLES , ETC., AT KADAVANTHARA AMOUNTS TO ` 8 , 06 , 328/-. THESE RODS , PIPES WERE - - ITA 1384/13 3 USED FOR THE CONSTRUCTION OF A TEMPORARY SHED. HE HAS ALSO VERIFIED THE LEASE DEED OF THE KADAVANTHARA BRANCH PROPERTY. THE INITIAL LEASE DEED WAS ENTERED WITH THE BUILDING OW NER IN THE YEAR 2003 AT THE TIME OF COMMENCING OF CONSTRUCTION . THE BU I LD I N G APPROVAL GOT DELAYED AND ANOTHER DEED WAS PREPARED IN THE YEAR 2009, I . E., ON 2 . 7.2009. THE PERIOD OF LEASE IS FOR 10 YEARS. THE ASSESSEE HAS CONSTRUCTED A TEMPORARY SHED IN THE SE COND FLOOR FOR THE WORKERS. ACCORDING TO THE CIT (A), THIS CA NNOT BE CALLED AS A TEMPORARY SHED BUT IT IS A CASE OF PERMANENT FIXT URE FOR SHELTERING THE WORK FORCE AND IT CANNOT BE CLAIMED AS REVENUE EXPENDITURE/BUSINESS EXPENDITURE. ON ACCOUNT OF IN TERIOR DECORATIONS, THE ASSESSEE HAS SPENT ` 12,58,837/- AT THIS BRANCH . THE INTERIOR DECORATION INCLUDES WOODEN PANELING , CLASS BOX / STRUCTURES TO DISPLAY THE BAKERY PRODUCTS , ETC. THIS EXPENDITURE WAS INCURRED BY THE ASSESSEE TAKING INTO CONSIDERAT ION THAT THE LEASE PERIOD WAS FOR A PERIOD OF 10 YEARS. THE AMOU NT HAS BEEN SPENT BY THE ASSESSEE ON THE LEASE HOLD PREMISES TO MAKE IT SUITABLE TO CARRY OUT BUSINESS IN THE SHOW ROOMS . THE ASSESSEE HAS FAILED TO SHOW ANY BENEFIT OF ENDURING NATURE D ERIVED FROM THE RENOVATION / RECONSTRUCTION OF THE LEASED OUT PREMI SES. TO FALL - - ITA 1384/13 4 WITHIN THE AMBIT OF EXPLANATION 1 , QUESTIONS WHICH ARE TO BE ANSWERED ARE (I) WHETHER THE ASSESSEE IS CARRYING ON BUSINESS O R PROFESSION IN A LEASED BUILDING OR OTHER RIGHTS OF OCCUPANCY . (II) WHETHER THE ASSESSEE HAS INCURRED ANY CAPITAL EXPENDITURE FOR THE PURPOSE OF BUSINESS ON THE CONSTRUCTION OF ANY STRUCTURE OR DOING ANY WORK OR IN RELATION TO AND BY WAY OF RENOVATION OR EXTENSION O R IMPROVEMENT IN THE BUILDING. IF THE ANSWER TO THE AFOREMENTIONED QUESTIONS IS IN AFFIRMATIVE, THE ASSESSEE FALLS WITHIN THE PURVIEW OF EXPLANATIO N 1 TO SECTION 32(1). IN THE INSTANT CASE, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS TAKEN SEVERAL BUILDINGS ON LEASE FOR SETTING UP OF BAKERY BUSINESS . IT IS ALSO UNDISPUTED THAT THE ASSESSEE HAS CARRIED OUT RENOVATION, RESTRUCTURING INCLUDING FLOORING, FALSE CEILING, SANITARY WORKS, PARTITION, WALL PANELLING, CUP BOARDS, ETC., AT THE LEASE PREMISES. THE ASSESSEE HAS MADE CERTAIN CHANGES BY MEANS OF ELECTRICAL WORKS, SANITARY AND VITRIFIED TILES, ETC . ALL THESE ACTIVITIES CARRIED OUT BY THE ASSESSEE IF PUT TO TH E TEST OF EXPLANATION 1 WOULD SHOW THAT RENOVATION I REPAIR I ADDITION MADE BY THE ASSESSEE ON THE LEASED OUT PREMISES WOU LD AMOUNT - - ITA 1384/13 5 TO CAPITAL EXPENDITURE . HE RELIED ON THE ORDER OF THIS TRIBUNAL IN ITA NOS . 1557 AND 1558/MDS/11 IN THE CASE OF M/S ABT LIMITED VS ACIT, COIMBATORE (ORDER DATED 3 RD JANUARY 2013), WHEREIN IT WAS HELD THAT 'WE CAN CONCLUDE THAT IT IS ESSENTIAL THAT THE EXPENDITURE INCURRED ON THE CONSTRUCTION OF ANY STR UCTURE ON THE LEASED PREMISES SHOULD RESULT IN SAVING OF THE REVE NUE EXPENDITURE AT THE SUBSEQUENT STAGE'. THE BENCH HELD THAT THE NEW ELECTRICAL FITTINGS, RENOVATION OF EXISTING BUI LDING ARE CAPITAL IN NATURE . WHILE DELIVERING THE JUDGMENT, THE TRIBUNAL HAS CONSIDERED THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF CLT VS TVS LIEN LOGISTICS LIMITED REPORTED IN 293 I TR 432 (MADRAS) AND ANOTHER JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF THIRU AROORAN SUGARS LIMITED VS DCLT DE CIDED ON 26.7.2011 . THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE TRIBUNAL 'B' BENCH IN ITA NOS.1557 AND 1558/MDS/11, THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN TR EATING THE EXPENDITURE AS CAPITAL IN NATURE. 4.1. AS FAR AS ALINCHUVADU BRANCH IS CONCERNE D, THE CIT(A) OBSERVED THAT THE EXPENDITURE INCURRED IN THIS BRAN CH WAS FOR ` 6 , 46,929/-. THE EXPENDITURE WAS INCURRED TOWARDS THE INTERIORS, - - ITA 1384/13 6 FLOOR TILING AND CONSTRUCTION OF TEMPORARY SHED. TH E LEASE AGREEMENT FOR THIS BRANCH WAS ENTERED ON 23.10.2008 AND WAS FOR A PERIOD OF 5 YEARS. A TEMPORARY SHED FOR WORKE RS STAY WAS CONSTRUCTED ALONG WITH INTERIORS, FLOOR TILING AND TEMPORARY SHED. FOLLOWING THE DISCUSSION MADE IN THE CASE OF KADAVA NTHARA BRANCH AND FOLLOWING THE DECISION OF THE TRIBUNAL C ITED SUPRA, HE CONFIRMED THE ACTION OF THE AO IN TREATING THE EXPE NDITURE AS CAPITAL NATURE. 4.2. REGARDING PALARIVATTAM BRANCH, THE CIT(A) OBSERVED THAT THE EXPENDITURE INCURRED IN THIS BRANCH WAS FOR ` 2,36,550/-. THE BRANCH WAS STARTED IN THE YEAR 2001 AND THE EXPENDI TURE WAS DEBITED TOWARDS THE REPLACEMENT OF TABLE IN THE KIT CHEN . AS PER THE SUBMISSIONS MADE BY THE AR , THIS TABLE HAS TO BE REPLACED ONCE IN TWO YEARS. HOWEVER, THE ASSESSEE HAS NOT F URNISHED ANY DETAILS WITH REGARDS TO THE NATURE OF TABLE WHI CH HAS BEEN REPLACED IN THIS BRANCH, THE CIT(A) CONFIRMED THE A CTION OF THE ASSESSING OFFICER IN TREATING THE EXPENDITURE AS CA PITAL IN NATURE. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF TH E KERALA HIGH COURT IN THE CASE OF JOY ALUKKAS INDIA PVT. LT D. V. ACIT (88 - - ITA 1384/13 7 CCH 147) AND PLEADED THAT THE ABOVE EXPENDITURE IS TO BE CONSIDERED AS REVENUE EXPENDITURE. 6. ON THE OTHER HAND, THE LD. DR RELIED ON THE DECI SION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF AB T LTD. VS. ACIT (21 ITR 534) 7. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IN THE PRESENT CASE, THE ASSESSEE HAS TAKEN THE BUILDI NG ON LEASEHOLD ON WHICH THE ASSESSEE CARRIED ON INTERIOR WORK AND CLAIMED AS REVENUE EXPENDITURE. THE SAME WAS REJECT ED BY THE CIT(A). THE LD. DR CONTENDED THAT THE ASSESSEE MADE NEW ADDITION THE LEASED BUILDING AND IT IS NOT THE CASE OF RENOVATION OF THE LEASED BUILDING OR IMPROVEMENT OF THE LEASED BU ILDING AS IN THE CASE OF JOY ALUKKAS PVT. LTD., CITED SUPRA AS H ELD BY THE KERALA HIGH COURT. FOR SETTLING THE CONTROVERSY, WE HAVE TO GO THROUGH THE EXPLANATION 1 TO SEC. 32(1) OF THE ACT WHICH WAS INSERTED BY THE TAXATION LAWS (AMENDMENT AND MISCEL LANEOUS PROVISIONS) ACT, 1986 WITH EFFECT FROM 1.4.1988 WHI CH DEALS WITH THE SITUATION WHERE THE EXPENDITURE HAS BEEN INCURR ED BY THE ASSESSEE ON CONSTRUCTION OF ANY STRUCTURE ON LEASEH OLD PREMISES. THE EXPLANATION 1 IS REPRODUCED HEREWITH BELOW: - - ITA 1384/13 8 EXPLANATION 1. WHERE THE BUSINESS OR PROFESSION IS CARRIED ON IN A BUILDING NOT OWNED BY HIM BUT IN RESPECT OF WHICH THE ASSESSEE HOLDS A LEASE OR OTHER RIGHT OF OCCUPANCY AND ANY C APITAL EXPENDITURE IS INCURRED BY THE ASSESSEE FOR THE PUR POSES OF BUSINESS OR PROFESSION ON THE CONSTRUCTION OF ANY S TRUCTURE OR DOING OF ANY WORK IN OR IN RELATION TO, AND BY WAY OF RENOVATION OR EXTENSION OF IMPROVEMENT TO, BUILDING THEN, THE PRO VISIONS OF THIS CLAUSE SHALL APPLY AS IF THE SAID STRUCTURE OR WORK IS A BUILDING OWNED BY THE ASSESSEE. 8. TO FALL WITHIN THE AMBIT OF EXPLANATION 1 Q UESTIONS WHICH ARE TO BE ANSWERED ARE: (I) WHETHER THE ASSESSEE IS CARRYING ON BUSINESS OR PROFESSION IN A LEASED BUILDING OR OTHER RIGHTS OF OCCUPANCY? (II) WHETHER THE ASSESSEE HAS INCURRED ANY CAPITAL EXPENDITURE FOR THE PURPOSE OF BUSINESS ON THE CONSTRUCTION OF ANY STRUCTURE OR DOING OF ANY WORK IN OR IN RELATION TO AND BY WAY OF RENOVATION OR EXTENSION O R IMPROVEMENT IN THE BUILDING. 9. IF THE ANSWER TO THE AFOREMENTIONED QUESTIO NS IS IN AFFIRMATIVE, THE ASSESSEE FALLS WITHIN THE PURVIEW OF EXPLANATION 1 TO SEC. 32(1). IN THE INSTANT CASE, IT IS AN ADMITT ED FACT THAT THE ASSESSEE HAS TAKEN BUILDING ON LEASE FOR SETTING UP OF BAKERY. IT - - ITA 1384/13 9 IS ALSO UNDISPUTED THAT THE ASSESSEE HAS CARRIED ON INTERIOR WORK IN THE LEASED BUILDING. THESE INTERIOR DECORATION WORKS CARRIED OUT BY THE ASSESSEE IF PUT ON TO THE TEST OF EXPLA NATION 1 WOULD SHOW THAT THE CONSTRUCTION MADE BY THE ASSESSEE ON THE LEASED OUT PREMISES WOULD AMOUNT TO CAPITAL EXPENDITURE. T HE ASSESSEE IN ORDER TO SUPPORT HIS CASE HAS RELIED ON THE JUDG MENT OF THE MADRAS HIGH COURT IN THE CASE OF TVS LEAN LOGISTICS LTD. (SUPRA). IN THE SAID CASE, THE ASSESSEE HAD CONSTRU CTED A BUILDING ON THE LEASED LAND FOR THE BUSINESS ADVANT AGE. THE COURT HELD THAT THE ENTIRE COST OF CONSTRUCTION IS ADMISSIBLE AS REVENUE EXPENDITURE. EXPLANATION 1 CATEGORICALLY ST ATES THAT THE BUSINESS OR PROFESSION IS CARRIED ON IN A LEASED BU ILDING AND NOT ON LAND. THE HIGH COURT IN PARA 4.4 OF THE JUDGMENT FURTHER HELD AS UNDER:- 4.4 WHAT CONSTITUTES A CAPITAL EXPENDITURE AND WHA T DOES NOT, TO ATTRACT EXPLN. 1 TO SECTION 32(1) OF T HE ACT DEPENDS UPON THE CONSTRUCTION OF ANY STRUCTURE OR DOING ANY WORK OR IN RELATION TO AND BY WAY OF RENOVATION, EXTENSION OR IMPROVEMENT TO THE BUILDIN G WHICH IS PUT UP IN A BUILDING TAKEN ON LEASE BY HIM FOR CARRYING ON HIS BUSINESS AND PROFESSION OF THE ASSESSEE, BUT NOT IN A CASE OF CONSTRUCTION OF ANY STRUCTURE OR DOING ANY WORK OR RELATION TO WHERE SU CH BUILDING IS PUT UP/CONSTRUCTED FOR THE PURPOSE OF BUSINESS OR THE PROFESSION OF THE ASSESSEE IN A LAN D TAKEN ON LEASE BY THE ASSESSEE. - - ITA 1384/13 10 10. THUS IT IS CLEAR THAT THE RATIO LAID DOWN B Y THE MADRAS HIGH COURT IN THE SAID JUDGMENT DOES NOT SUPPORT THE CAS E OF THE ASSESSEE. 11. IN THE PRESENT CASE, THE ASSESSEE HAS TAKEN BUILDING ON LEASE AND MADE CERTAIN INTERIOR DECORATION. IT IS T HE CASE THAT THE ASSESSE HAS BEAUTIFIED THE LEASED BUILDING. THE HIG H COURT HAS FURTHER HELD IN THE AFORESAID CASE THAT THE LANGUAG E EMPLOYED IN A STATUTE IS THE DETERMINATIVE FACTOR OF THE LEGISL ATIVE INTENT AND EVEN ASSUMING THERE IS A DEFECT OR ANY OMISSION IN THE WORDS USED IN THE LEGISLATURE, THE COURT CANNOT CORRECT O R MAKE UP THE DEFICIENCY, ESPECIALLY WHEN A LITERAL READING THERE OF PRODUCES AN INTELLIGIBLE RESULT AN ANY DEPARTURE FROM THE LITER AL RULE WOULD REALLY BE AMENDING THE LAW IN THE GARB OF INTERPRET ATION, WHICH IS NOT PERMISSIBLE AND WHICH WOULD BE DESTRUCTIVE OF J UDICIAL DISCIPLINE. 12. THE SUPREME COURT OF INDIA IN THE CASE OF MADRAS AUTO SERVICE (P) LTD., 233 ITR 468 WHILE DEALING WITH A SIMILAR CONTROVERSY HAS OBSERVED AS UNDER: 5 IN ORDER TO DECIDE WHETHER THIS EXPENDITURE IS REVENUE EXPENDITURE OR CAPITAL EXPENDITURE, ONE HAS TO LOOK AT THE EXPENDITURE FROM A COMMERCIAL POINT OF VIEW. WHAT - - ITA 1384/13 11 ADVANTAGE DID THE ASSESSEE GET BY CONSTRUCTING A BUILDING WHICH BELONGED TO SOMEBODY ELSE AND SPENDI NG MONEY FOR SUCH RECONSTRUCTION? THE ASSESSEE GOT A LONG LEASE OF A NEWLY CONSTRUCTED BUILDING SUITABLE TO ITS OWN BUSINESS AT A VERY CONCESSIONAL RENT. THE EXPENDITURE THEREFORE, WAS MADE IN ORDER TO SECURE A LONG LEASE OF NEW AND MORE SUITABLE BUSINESS PREMIS ES AT A LOWER RENT. IN OTHER WORDS, THE ASSESSEE MADE SUBSTANTIAL SAVINGS IN IN MONTHLY RENT FOR A PERIOD OF 39 YEARS BY EXPENDING THESE AMOUNTS. THE SAVING IN EXPENDITURE WAS A SAVING IN REVENUE EXPENDITURE IN THE FORM OF RENT. WHATEVER SUBSTITUTES FOR REVENUE EXPENDITURE SHOULD NORMALLY BE CONSIDERED AS REVENU E EXPENDITURE. MOREOVER, ASSESSEE IN THE PRESENT CASE DID NOT GET ANY CAPITAL ASSET BY SPENDING THE SAID AMOU NTS. THE ASSESSEE THEREFORE COULD NOT HAVE CLAIMED ANY DEPRECIATION. LOOKING TO THE NATURE OF THE ADVANTAG E WHICH THE ASSESSEE OBTAINED IN A COMMERCIAL SENSE, THE EXPENDITURE APPEARS TO BE REVENUE EXPENDITURE. 13. THEREAFTER, THE APEX COURT REFERRING TO SEV ERAL CASES DECIDED HELD AS UNDER: 11.ALL THESE CASES HAVE LOOKED UPON EXPENDITURE WHICH DID BRING ABOUT SOME KIND OF AN ENDURING BENE FIT TO THE COMPANY AS A REVENUE EXPENDITURE WHEN THE EXPENDITURE DID NOT BRING INTO EXISTENCE ANY CAPITA L ASSET FOR THE COMPANY. THE ASSET WHICH WAS CREATED BELONGED TO SOMEBODY ELSE AND THE COMPANY DERIVED AN ENDURING BUSINESS ADVANTAGE BY EXPENDING THE AMOUNT. IN ALL THESE CASES, THE EXPENSES HAVE BEEN LOOKED UPON AS HAVING BEEN MADE FOR THE PURPOSE OF CONDUCTING THE BUSINESS OF THE ASSESSEE MORE PROFITABLY OR MORE SUCCESSFULLY. IN THE PRESENT CAS E ALSO SINCE THE ASSET CREATED BY SPENDING THE SAID AMOUNT S DID NOT BELONG TO THE ASSESSEE BUT THE ASSESSEE GO T THE BUSINESS ADVANTAGE OF USING MODERN PREMISES AT A LOW RENT, THUS SAVING CONSIDERABLE REVENUE EXPENDIT URE - - ITA 1384/13 12 FOR THE NEXT 39 YEARS, BOTH THE TRIBUNAL AS WELL AS THE HIGH COURT HAVE RIGHTLY COME TO THE CONCLUSION THAT THE EXPENDITURE SHOULD BE LOOKED UPON AS REVENUE EXPENDITURE. 14. FROM THE ABOVE JUDGMENT, WE CAN CONCLUDE THAT IT IS ESSENTIAL THAT THE EXPENDITURE INCURRED ON THE CONS TRUCTION OF ANY STRUCTURE ON THE LEASED PREMISES SHOULD RESULT IN E NDURING BENEFIT. THAT ANY EXPENDITURE INCURRED FOR CIVIL WORK BY A LESSEE IN RESPECT OF THE LEASE PREMISES, WITHOUT ANY FURTH ER PROOF CANNOT BE SAID TO BE CAPITAL EXPENDITURE OR REVENUE EXPEND ITURE. IN ORDER TO FIND OUT THE NATURE OF EXPENDITURE, IT IS NECESSARY TO FIND OUT THE NATURE OF CONSTRUCTION PUT UP, THE PURPOSE OF CONSTRUCTION/RENOVATION AND THE USE TO WHICH THE CO NSTRUCTION PUT UP AND ALSO IF IT IS A CASE OF REPAIR, REPLACEMENT, ADDITION OR IMPROVEMENT HAS TO BE GONE INTO. IT IS ONLY ON THE AFORESAID MATERIAL, KEEPING IN MIND THE PRINCIPLES ENUNCIATED IN THE JUDGMENTS BY THE SUPREME COURT AND KEEPING IN MIND SECTION 37 AND SECTION 32 OF THE ACT, THAT ONE HAS TO DETERMIN E WHETHER THE EXPENDITURE IS REVENUE EXPENDITURE OR CAPITAL EXPEN DITURE. WHAT WOULD APPLY TO CIVIL WORK EQUALLY APPLIES TO ELECTR ICAL WORK OR INTERIOR DECORATION. THE ASSESSEE HAD NOT STATED THE NATURE OF CIVIL WORKS CONSTRUCTED, THE NATURE OF INTERIOR DEC ORATION MADE TO - - ITA 1384/13 13 THE LEASEHOLD PREMISES AND ALSO THE NATURE OF ELECT RICAL WORK UNDERTAKEN. IN THE ABSENCE OF THAT MATERIAL AND WI THOUT PROPER APPLICATION OF MIND, THE ASSESSING AUTHORITY PROCEE DED ON THE FOOTING THAT THE EXPENDITURE CONSTITUTED CAPITAL EX PENDITURE. 15. IN VIEW OF THE ABOVE, WE REMIT THE ISSUE I N DISPUTE TO AO TO CONSIDER WHETHER THE EXPENDITURE IS REVENUE OR C APITAL IN NATURE AND DECIDE AFRESH. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 29 TH OF MAY, 2015 AT CHENNAI. SD/- SD/- ( $% &'( ) ) ( $ ( * + ) ,-.//.0.12345.65.7.48 ,-.345.699:.5 ;8 ' )< /JUDICIAL MEMBER ! )<=>>9?3@.3@A2BC25 $' /CHENNAI, D) /DATED, THE 29 MAY, 2015. MPO* )E FGHG /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. I 8 /CIT(A) 4. I / CIT 5. GJ& K /DR 6. &LM /GF.