The ACIT Corporate, Cochin V. M/s.Nippon Motor Corporation P. Ltd, Cochin

ITA 218/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8536 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 1 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 24-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-04-2015
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Keywords: Capital asset; Depreciation; Business expenditure; Revenue expenditure; Capital expenditure

Judgement Text

ITA NO.218/COCH/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM ITA NO.218/COCH/2015 (ASST YEAR : 2010-11) THE ASSISTANT COMMISSIONER OF INCOME-TAX, CORPORATE CIRCLE-1(2), KOCHI. NIPPON MOTORS CORPORATION PRIVATE LIMITED, XIX/9C, NIPPON TOWERS, NH 47, HMT JUNCTION, KOCHI. ( REVENUE APPELLANT) VS (ASSESSEE-RESPONDENT) PAN NO. AACCM 4485G REVENUE BY SHRI K.P. GOPAKUMAR, SR. DR ASSESSEE BY SHRI MATHEW JOSEPH, CA DATE OF HEARING 24/05/2016 DATE OF PRONOUNCEMENT 06/06/2016 ORDER PER B.P. JAIN, AM: THIS APPEAL OF THE REVENUE ARISES FROM THE OR DER OF THE LD. CIT(A)-I DATED 29.01.2015 FOR THE ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APP EALS)-I, KOCHI, IN APPEAL NO. I.T.A. NO.97/R-4/EKM/CIT(A)-I/2013-14 DT. 29/01 /2015 IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.218/COCH/2015 2 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER HOLDING THAT THE CONSTRUCTION/ALTERATION OF CAR PARKING IN THE LEASE D PREMISES AND REPAIRING WORKS OF A CANAL WHICH IS IN GOVERNMENT LAND, ARE R EVENUE IN NATURE WITHOUT CONSIDERING THE FACT THAT THE EXPENDITURE INCURRED ON LEASE HOLD FOR GETTING AN ENDURING EFFECT TO BE TREATED AS CAPITAL IN NATURE AS PER EXPLANATION 1 TO SECTION 32(1). 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS REQUESTED THAT THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORE D. 3. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW:- ON VERIFICATION OF THE EXPENDITURES DEBITED ON ACC OUNT OF THE REPAIRS AND MAINTENANCE IT WAS SEEN THAT SOME OF THE EXPENDITUR ES ARE NOT IN THE NATURE OF THE REGULAR REPAIRS AND MAINTENANCE. DETAILS OF THE EXPENDITURES MADE ON ACCOUNT OF THE REPAIRS AND MAINTENANCE WERE PROV IDED BY THE ASSESSEE VIDE LETTER DATED 22.02.2013. ASSESSEE STATED THAT THE ENTIRE AMOUNT WAS ON ACCOUNT OF REPAIRS AND MAINTENANCE OF THE COMPANY A T ITS UNITS AT COCHIN, TRICHUR, TRIVANDRUM AND KOTTAYAM. ON VERIFICATION IT WAS SEEN THAT FOLLOWING EXPENSES ARE NOT IN THE NATURE OF REGULAR REPAIRS A ND MAINTENANCE. A.MODIFICATION OF THE CAR PARK AREA AT THE LEASED PREMISES RS.64,43,629 B. WORK DONE THROUGH SAJEEV J. RS.20,00,140 C. EPOXY COATING OF THE FLOOR RS.22,79,510 D.MATERIAL PURCHASES (AS PER LEDGER PROVIDED BY THE ASSESSEE) A. PURCHASE OF STEEL (THRISSUR) RS.7,59,592 B. PURCHASE OF STEEL (THRISSUR) RS.7,59,489 C. PURCHASE OF CEMENT (THRISSUR) RS.4,20,000 D. PURCHASE OF STEEL (KOTTAYAM) RS.4,06,760 E. PURCHASE OF STEEL (KOTTAYAM) RS.3,93,600 F. PURCHASE OF STEEL (NETTOOR) RS.10,96,000 G. PURCHASE OF STEEL (NETTOOR) RS.11,09,440 H. PURCHASE OF STEEL (NETTOOR) RS.4,07,129 ITA NO.218/COCH/2015 3 I. PURCHASE OF CEMENT (NETTOOR) RS.9,55,850 TOTAL RS.1,70,30,139/- THE EXPENDITURE LISTED ABOVE ARE CLEARLY FOR MAJOR CIVIL CONSTRUCTIONS, THE EXPENSES INCLUDE BOTH MATERIAL PURCHASES OF STEEL & CEMENT AND COST OF THE LABOUR INVOLVED. ASSESSEE CLAIMED THAT ALL THE ABOV E EXPENDITURES ARE ON ACCOUNT OF IMPROVEMENTS OF THE EXISTING BUILDING AN D SOME OF THEM ARE LOCATED IN LEASED LAND. ASSESSEES AUTHORIZED REPRE SENTATIVE ARGUED THAT EXPENSES OF CAPITAL NATURE INCURRED ON LEASED ASSET SHALL BE CONSIDERED AS REVENUE EXPENDITURE. ON VERIFICATION OF THE EXPEND ITURES AS LISTED ABOVE IT IS VERY CLEAR THAT THESE EXPENDITURES CANT BE CONSIDE RED AS REVENUE IN NATURE. ALL THESE EXPENDITURES ARE TOWARDS ADDING A CAPITAL ASSET OR FOR CONSIDERABLY INCREASING THE UTILITY OF THE EXISTING ASSET. THE EPOXY COATING OF THE FLOOR INCREASES THE LIFE AND UTILITY OF THE ASSET, WHICH IS GOING TO GIVE ENDURING BENEFIT TO THE ASSESSEE FOR YEARS. THE NEXT QUESTION IS WH ETHER EXPENSES OF CAPITAL NATURE INCURRED ON ASSET WHICH ARE NOT OWNED BY THE ASSESSEE SHOULD BE TREATED AS CAPITAL OR REVENUE. EXPLANATION 1 TO SEC TION 32(1) WHICH WAS INSERTED WITH EFFECT FROM 1.04.1988 STATES THAT W HERE THE BUSINESS OR PROFESSION OF THE ASSESSEE IS CARRIED ON IN A BUILD ING NOT OWNED BY HIM BUT IN RESPECT OF WHICH THE ASSESSEE HOLDS A LEASE OR OTHE R RIGHT OF OCCUPANCY AND ANY CAPITAL EXPENDITURE IS INCURRED BY THE ASSESSEE FOR THE PURPOSES OF THE BUSINESS OR PROFESSION ON THE CONSTRUCTION OF ANY S TRUCTURE OR DOING OF ANY WORK, IN OR IN RELATION TO, AND BY WAY OF RENOVATIO N OR EXTENSION OF, OR IMPROVEMENT TO, THE BUILDING, THEN, THE PROVISIONS OF THIS CLAUSE SHALL APPLY AS IF THE SAID STRUCTURE OR WORK IS A BUILDING OWNED BY T HE ASSESSEE. THAT IS EVEN IF THE ASSET IS LEASED, FOR CONSIDERING THE EXPENSES O F CAPITAL NATURE, THE ASSET WILL BE DEEMED TO BE OWNED BY THE ASSESSEE. THUS HAVING CONCLUDED THAT THE EXPENSES ARE OF CAPITAL NATURE, WITH THE HELP OF TH E EXPLANATION AS NARRATED ABOVE, THE EXPENSES INCURRED ABOVE, SHALL BE DISALL OWED AND ASSESSEE MAY BE ALLOWED DEPRECIATION ON IT. LEARNED REPRESENTATIVE OF THE ASSESSEE VIDE LETTER DATED 26-02-2013 CITED THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CI T VS. AYESHA HOSPITAL (P) LTD. 202 ITR 266 (MAD) TO SUPPORT HIS CASE. THE FA CTS IN THE GIVEN CASE ARE DISTINGUISHABLE IN THAT, THERE THE HONBLE HIGH COU RT WAS ENDORSING THAT THE PAINTING, RELAYING OF DAMAGED FLOORING ETC. ARE NOT OF CAPITAL EXPENDITURE. HERE THE EXPENDITURES ARE OF NOT THAT KIND, BUT MAJ OR CONSTRUCTION, PAINTING OR REPAIRING OF DAMAGES ARE NOT THAT KIND, BUT MAJOR C ONSTRUCTION, PAINTING OR ITA NO.218/COCH/2015 4 REPAIRING OF DAMAGES ARE NOT CONSIDERED FOR DISALLO WANCE. ASSESSEE ALSO QUOTED CIT VS. DR. A.M. SINGHVI 212 CTR 1 (RAJ.). AS ABOVE, THE FACTS ARE DISTINGUISHABLE IN THAT THE EXPENDITURE WAS ON ACCO UNT OF THE RENOVATION AND NOT ANY CAPITAL ADDITION. THE OTHER TWO CASES QUOT ED BY THE ASSESSEE, ARE FOLLOWING THE HONBLE SUPREME COURT JUDGMENT REPORT ED IN CIT VS. MADRAS AUTO SERVICES (P) LTD. RELATING TO ASSESSMENT YEAR 1968-69. THE EXPLANATION 1 TO SECTION 32(1)OF THE INCOME TAX ACT, 1961 TAKES CARE OF THAT ARGUMENT. I HAVE VERIFIED THE LEASE AGREEMENT AND SAW THAT LEASE PER IOD WAS VARYING FROM 5 YEARS TO 15 YEARS. THAT IS ASSESSEE IS GETTING ENDU RING BENEFIT FOR THE YEARS TO COME. THE RIGHT THING IS TO CLAIM DEPRECIATION. THU S, RS.1,70,30,139/- CLAIMED AS REVENUE EXPENSES IS DISALLOWED. AFTER GRANTING ELI GIBLE DEPRECIATION OF 10%, THE BALANCE SHALL BE ADDED BACK TO THE INCOME. 4 . THE ASSESSEE MADE ITS SUBMISSION BEFORE THE LD. CIT (A) WHICH WAS FOUND SATISFACTORY AND THE LD. CIT(A) DELETED THE SAID AD DITION BY HOLDING THAT THE EXPENSES HAVE BEEN INCURRED AT DIFFERENT PLACES IN ORDER TO KEEP AND MAINTAIN THE BUSINESS PROPERTIES, COVER UP WEAR AND TEAR AND TO MAINTAIN THE AMBIENCE OF THE BUILDING AND ACCORDINGLY, EPOXY COATING, RE PLACEMENT OF TILES, DRAINAGE SYSTEM, AND WORN OUT PORTIONS OF THE PARKING AREA A RE NOTHING BUT EXPENSES IN THE NATURE OF REVENUE EXPENDITURE. THE ASSESSEE HA S FILED THE PHOTOGRAPHS OF THE AREA WHERE REPAIR WORKS HAVE BEEN UNDERTAKEN AN D ACCORDINGLY THE ADDITION MADE BY THE ASSESSING OFFICER WAS HELD TO BE NOT SUSTAINABLE. 5. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER. ITA NO.218/COCH/2015 5 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTH ER HAND RELIED UPON THE DECISION OF THE HONBLE KERALA HIGH COURT (FULL BEN CH) IN THE CASE OF INDUS MOTORS CO. P. LTD. VS. DCIT DATED 17.02.2016 REPORT ED IN 382 ITR 503 AND THE JUDGMENT OF THE DIVISION BENCH OF THE HONBLE KERAL A HIGH COURT IN THE CASE OF JOY ALUKKAS INDIA PVT. LTD. VS. ACIT IN I.T.A. NO. 230 OF 2013 DATED 20-01-2014. 7. THE LD. AR RELIED UPON THE WRITTEN SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND THE ASSESSING OFFICER WHICH ARE REPRODUCED AT P AGES 5 TO 11 OF THE ORDER OF THE CIT(A). IT WAS FURTHER ARGUED BY THE LD. COUNSE L FOR THE ASSESSEE THAT IMPROVEMENTS HAVE BEEN DONE IN THE LEASEHOLD OPEN C AR PARK AREA AND IN THE REVENUE LAND WHEREAS IN THE CASE OF JOY ALUKKAS CAS E, IMPROVEMENTS WERE DONE IN LEASEHOLD BUILDING. ACCORDINGLY, EXPLANATI ON 1 TO SECTION 32(1) IS NOT APPLICABLE. 8. WITH REGARD TO THE RELIANCE BY THE REVENUE ON THE DECISION OF THE FULL BENCH OF THE HONBLE HIGH COURT OF KERALA DATED 17-02-201 6, IT HAS BEEN CLEARLY MENTIONED BY THE HONBLE HIGH COURT THAT THE RATIO OF THE JUDGMENT OF THE DIVISION BENCH OF HONBLE KERALA HIGH COURT IN THE JOY ALUKKAS CASE AS EXPRESSED IN PARAGRAPH 28 OF THE JUDGMENT NEEDS NO RECONSIDERATION. ITA NO.218/COCH/2015 6 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE EXPLANATION SUBMITTED BY THE LD. COUNSEL WHICH IS PART OF THE RECORD WAS THAT MOST OF THE REPAIRS WERE CARRIED OUT AT THE LE ASEHOLD PREMISES AND ON THE GOVERNMENT LAND WHICH IS BY THE SIDE OF THE MINOR I RRIGATION CANAL WHICH FACT WAS IGNORED BY THE ASSESSING OFFICER. THE REPAIRS DONE IN OWN PREMISES ARE THE CAR PARK AREA AND OPEN AREA WHICH NEEDS PERIODIC RE PAIRS. FOLLOWING EXPENSES HAVE BEEN DISALLOWED BY THE ASSESSING OFFICER: A) MODIFICATION OF THE CAR PARK ARE AT THE LEASED PREM ISES 64,43,629 B) WORK DONE BY SAJEEV J (WALL PAINTING AND LANDSCAPING) 20,00,140 C) EPOXY COATING OF THE WORKSHOP FLOOR 22,78,510 D) MATERIAL PURCHASES (AS PER LEDGER PROVIDED BY THE ASSESSEE) A) PURCHASE OF STEEL (THRISSUR) 759,592 B) PURCHASE OF STEEL (THRISSUR) 759,489 C) PURCHASE OF CEMENT (THRISSUR) 4,20,000 D) PURCHASE OF STEEL (KOTTAYAM) 4,05,760 E) PURCHASE OF STEEL (KOTTAYAM) 3,93,600 F) PURCHASE OF STEEL (NETTOOR) 10,96,000 G) PURCHASE OF STEEL (NETTOOR) 11,09,440 H) PURCHASE OF STEEL (NETTOOR) 4,07,129 I) PURCHASE OF CEMENT (NETTOOR) 9,55,850 TOTAL RS.1,70,30,139/- THE ASSESSEE HAS SUBMITTED THE PHOTOGRAPHS OF ALL T HE ABOVE STATIONS BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A). THE ASSESSIN G OFFICER HAS SIMPLY GONE INTO THE QUANTUM OF EXPENDITURE INCURRED AND HAS STATED THAT THE EXPENSES ARE FOR ITA NO.218/COCH/2015 7 MAJOR CIVIL CONSTRUCTIONS WHICH INCLUDE BOTH MATERI AL PURCHASES OF STEEL & CEMENT AND COST OF THE LABOUR INVOLVED. THE EXPEND ITURE OF RS.64,43,629/- WAS INCURRED FOR REPAIRING THE CAR PARK AREA IN THE LEA SED PREMISES BY REPLACING THE OLD PAVING TILES. DUE TO CONSTANT USE AND WEAR AND TEAR THE TILES WERE DAMAGED WHICH IN FACT ARE REPLACED AT FREQUENT INTE RVALS AND FOR KEEPING THE PREMISES READY FOR FUNCTIONAL USE. FURTHER, NO ASSE T OR BENEFIT OF ENDURING NATURE WAS ACHIEVED FROM INCURRING SUCH EXPENDITURE. 10. AS REGARDS EXPLANATION 1TO SECTION 32(1) OF THE ACT WHICH READS AS UNDER: EXPLANATION 1 WHERE THE BUSINESS OR PROFESSION IS CARRIED ON IN A BUILDING NOT OWNED BY HIM BUT IN RESPECT OF WHICH THE ASSESSEE H OLDS A LEASE OR OTHER RIGHT OF OCCUPANCY AND ANY CAPITAL EXPENDITURE IS INCURRE D BY THE ASSESSEE FOR THE PURPOSES OF BUSINESS OR PROFESSION ON THE CONSTRUCT ION OF ANY STRUCTURE OR DOING OF ANY WORK IN OR IN RELATION TO, AND BY WAY OF RENOVATION OR EXTENSION OF IMPROVEMENT TO, BUILDING THEN, THE PROVISIONS OF TH IS CLAUSE SHALL APPLY AS IF THE SAID STRUCTURE OR WORK IS A BUILDING OWNED BY T HE ASSESSEE. ESSENTIALLY ON READING OF EXPLANATION 1 TO SECTION 32(1), TWO CONDITIONS HAVE TO BE SATISFIED AS UNDER; 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 OF ANY WORK IN OR IN RELATION TO AND BY WAY OF RENOVATION OR EXTENSION OR IMPROVEMENT IN THE BUILDING . ITA NO.218/COCH/2015 8 IN THE PRESENT CASE, THE ASSESSEE HAS NOT CONSTRUCT ED ANY BUILDING OR OTHER PERMANENT STRUCTURE IN THE LEASEHOLD PREMISES FOR T HE PURPOSE OF BUSINESS. THE ASSESSEE ONLY REPAIRED THE CAR PARKING AREA TO MAKE IT FUNCTIONAL FOR RUNNING THE BUSINESS. 11. AS REGARDS THE DISALLOWANCE OF RS.20,00,140 FOR REPAIR OF WORKSHOP AND RS.22,79,510 FOR EPOXY COATING, IT WAS EXPLAINED BY THE ASSESSEE THAT THE AMOUNT OF RS.20,00,140/- WAS EXPENDED FOR THE CURRENT REPA IRS TO THE WORKSHOP I.E., PAINTING OF THE WORKSHOP FLOOR AND REPAIRS OF THE O PEN YARD AND LAWN. THE BENEFIT OBTAINABLE FROM THIS IS ONLY TEMPORARY AND THE EXPENDITURE IS INCURRED FOR RUNNING THE BUSINESS MORE EFFICIENTLY. REGARDING EPOXY COATING WHICH WAS MORE THAN TWO YEARS OLD AND GOT DAMAGED BY CONSTANT WEAR AND TEAR, IT HAS TO BE DONE PERIODICALLY TO FACILITATE A CLEAN ENVIR ONMENT. THIS EXPENDITURE DID NOT CREATE ANY NEW ASSET OF ENDURING BENEFIT . 12. AS REGARDS PURCHASE OF STEEL AND CEMENT AT T HRISSUR, IT IS RELATED TO REPAIR AND STRENGTHENING OF THE RETAINING WALL ON THE SIDE OF THE CANAL OWNED BY THE IRRIGATION DEPARTMENT, GOVERNMENT OF KERALA. THE R OAD TO THE PROPERTY WAS THROUGH THE SIDE OF THE CANAL AND THE ROAD WAS STR ENGTHENED BY CONSTRUCTING A RETAINING WALL DURING THE YEAR 2005 WITH THE SANCTI ON OF THE THRISSUR CORPORATION. THE NECESSARY COPY OF CORRESPONDENCE FROM THE OFFIC E OF THE EXECUTIVE ITA NO.218/COCH/2015 9 ENGINEER, MINOR IRRIGATION DIVISION, THRISSUR WAS S UBMITTED BEFORE BOTH THE AUTHORITIES BELOW. THE ENTIRE CONSTRUCTION WAS DAM AGED AND THE ROAD WAS UNDER THE THREAT OF GETTING SUNK INTO THE CANAL . IT WAS BECAUSE OF THIS REASON THAT STEEL AND CEMENT WALL WAS REINFORCED AND THIS REPAIR WORK WAS CARRIED OUT IN THE GOVERNMENT LAND FOR THE PURPOSE OF BUSINESS AND THEREFORE, IT IS REVENUE IN NATURE. COPY OF THE SANCTION FOR THE ORIGINAL WORK WAS ALSO SUBMITTED TO THE AUTHORITIES BELOW. 13. PURCHASE OF STEEL FOR REPAIRS AT KOTTAYAM WAS TO REPAIR THE WORN OUT PORTION OF THE WORKSHOP AND CAR PARKING AREA. PURCHASE OF STEEL AND CEMENT AT NETTOOR AMOUNTING TO RS.35.68 LAKHS WAS FOR THE REP AIR OF THE CANAL PASSING THROUGH THE PROPERTY OF THE ASSESSEE. 14. IT WAS EXPLAINED THAT THE ASSESSEE HAS ATTAIN ED A TURNOVER OF RS.460.93 CRORES AND A TAXABLE PROFIT OF RS.5.46 CRORES WITH OVER 1000 EMPLOYEES WHICH WAS ACHIEVED BY KEEPING THE COMFORT OF THE CUSTOMER S AND THE EMPLOYEES AT HIGH LEVEL BY PROVIDING QUALITY WORK STATION AND FA CILITIES TO THE CUSTOMERS. IT WAS ALSO EXPLAINED THAT THE ASSESSEE HAS NOT BEEN ABLE TO RETRIEVE ANY EXPENDITURE FROM THE LEASED PREMISES OUT OF THE SAID REPAIRS MA DE AND THEREFORE, THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CA SE OF JOY ALUKKAS VS. ACIT IN I.T.A. NO.230 OF 2013 DATED 20-01-2014 IS APPLICABL E IN THE PRESENT CASE. THE ITA NO.218/COCH/2015 10 RELEVANT PARAGRAPH OF THE DECISION OF THE HONBLE H IGH COURT OF KERALA IN THE CASE OF JOY ALUKKAS (SUPRA) IS REPRODUCED HEREINBEL OW:- THE BUSINESS EXPENDITURE IRRESPECTIVE OF CREATING ENDURING BENEFIT OR ADVANTAGE EVEN IF IT IS A PROFIT EARNING EFFORT UNL ESS AT THE END OF THE TERM OF LEASE THE ITEMS ON WHICH EXPENDITURE WAS SPENT COUL D BE RETRIEVED BY THE APPELLANTS ASSESSES, IT SHALL NOT AMOUNT TO CAPIT AL EXPENDITURE BUT IT CAN BE TERMED ONLY AS REVENUE EXPENDITURE. 15. AS REGARDS DECISION OF THE HONBLE KERALA H IGH COURT (FULL BENCH) IN THE CASE OF INDUS MOTORS CO. P. LTD. VS. DCIT DATED 17. 02.2016 REPORTED IN 382 ITR 503, THE HONBLE HIGH COURT HAS CLEARLY MENTIONED T HAT THE RATIO OF THE JUDGMENT IN JOY ALUKKAS CASE AS EXPRESSED IN PARAGR APH 28 OF THE JUDGMENT NEEDS NO RECONSIDERATION. IT WAS FURTHER HELD THA T A PARTICULAR EXPENDITURE WAS CAPITAL EXPENDITURE OR REVENUE EXPENDITURE WAS TO B E FOUND OUT BY APPLYING THE RELEVANT FACTS IN EACH CASE. IN THE PRESENT CA SE, AS PERUSED BY US, THE ASSESSEE HAS INCURRED REVENUE EXPENDITURE. THE ASSE SSEE HAS NOT BEEN ABLE TO RETRIEVE THE EXPENDITURE INCURRED AT THE END OF THE LEASE. NO ENDURING BENEFIT HAS BEEN ACHIEVED BY THE ASSESSEE AND NO ASSET IS C REATED BY THE ASSESSEE. THEREFORE, THE DECISION OF THE HONBLE HIGH COURT O F KERALA IN THE CASE OF JOY ALUKKAS (SUPRA) IS SQUARELY APPLICABLE IN THE PRESE NT CASE AND THEREFORE, THE SAID EXPENDITURE INCURRED IS HELD TO BE TREATED AS REVEN UE EXPENDITURE AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION SO ITA NO.218/COCH/2015 11 MADE BY THE ASSESSING OFFICER. THUS ALL THE GROUND S OF THE REVENUE ARE DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IN I .T.A. NO. 218/COCH/2015 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06-06-2016 SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : COCHIN DATED: 6TH JUNE , 2016 GJ COPY TO: 1. NIPPON MOTORS CORPORATION PRIVATE LIMITED, XIX/ 9C, NIPPON TOWERS, NH 47, HMT JUNCTION, KOCHI. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CORPO RATE CIRCLE-1(2), KOCHI . THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. THE DR/ITAT, COCHIN BENCH. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN ITA NO.218/COCH/2015 12 1.DATE OF DICTATION : 30/05/2016 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER OTHER MEMBER: 01/06/201 6 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . PS/PS:02/06/2016 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER : 02/06/2016 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. PS/PS : 06/06/2016 6. DATE ON WHICH THE FILE GOES TO BENCH CLERK: 06/ 06/2016 7. DATE ON WHICH THE FILE GOES TO HEAD CLERK: 8. DATE ON WHICH THE FILE GOES TO ASSISTANT REGISTR AR 9. DATE OF DISPATCH OF THE ORDER: