Dr. S.S.Lakshmanan, CHENNAI V. ACIT, CHENNAI

ITA 297/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6070 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 19-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: M KARUNAKARAN
• Keywords: Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.297/MDS/2017 ( )( / ASSESSMENT YEAR : 2011-12 DR. S.S. LAKSHMANAN, C/O R.N. PATEL & G. SURULIVEL, ADVOCATES & TAX CONSULTANTS, 16, FIRST STREET, DR.THIRUMURTHI NAGAR, CHENNAI - 600 034. PAN : AAAPL 7578 E V. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE VI, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI M. KARUNAKARAN, ADVOCATE -.+, / 0 / RESPONDENT BY : MS. S. VIJAYAPRABHA, JCIT 1 / 2% / DATE OF HEARING : 25.09.2017 3') / 2% / DATE OF PRONOUNCEMENT : 25.09.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -5, CHENNA I, DATED 11.05.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2 I.T.A. NO.297/MDS/17 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF EXPENDITURE INCURRED BY THE ASSESSEE FOR RENOVATING THE LEASED HOSPITAL PREMISES. 3. SHRI M. KARUNAKARAN, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ASSESSEE HAS TAKEN A PROPERTY ON LEASE 30 YEARS AGO. DURING THE YEAR UNDER CONSIDERATION, THE ASSE SSEE INCURRED CERTAIN EXPENDITURE FOR RENOVATING THE BUILDING. A CCORDING TO THE LD. COUNSEL, THE EXPENDITURE WAS INCURRED BY THE ASSESS EE FOR REPLACING FLOORING, FALSE CEILING, BATHROOM FITTINGS, ELECTRI CALS FITTINGS, ETC. THESE EXPENDITURES WERE CLAIMED AS REVENUE EXPENDIT URE WHILE COMPUTING THE TOTAL INCOME. HOWEVER, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER DISALLOWED THE EXPENDITURE ON THE GROUND THAT THEY ARE CAPITAL EXPENDITURE. ACCORDING TO THE LD. COUNSEL, NO STRUCTURAL CHANGE WAS MADE, BUILDING REMAINED THE S AME AND THE BUILDING WAS MADE FIT FOR CONTINUING THE PROFESSION OF THE ASSESSEE. ACCORDING TO THE LD. COUNSEL, THE HOSPITAL SHOULD B E MAINTAINED IN A CLEAN AND GOOD SANITARY CONDITIONS SO THAT THE PATI ENTS WOULD LIKE TO VISIT THE HOSPITAL FOR TREATMENT. 4. ON THE CONTRARY, MS. S. VIJAYAPRABHA, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE EXPENDITURE INCU RRED BY THE 3 I.T.A. NO.297/MDS/17 ASSESSEE ON LEASE BUILDING GIVES AN ENDURING BENEFI T TO THE ASSESSEE. THEREFORE, ACCORDING TO THE LD. D.R., TH E CIT(APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OF FICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE TOOK A PREMISES ON LEASE AND IS RUNNING A HOSPITAL FOR MORE THAN 30 YEARS. THE ASSESSEE HAS NOW INCURRED CERTAIN EXPENDITURE FOR CHANGING THE FLOORING, FALS E CEILING, ELECTRICAL FITTINGS, ETC. NO STRUCTURAL CHANGE HAS BEEN MADE. NO NEW CONSTRUCTION HAS BEEN MADE. THEREFORE, THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE EXPENSES INCURRED BY TH E ASSESSEE ARE IN REVENUE FIELD. THEREFORE, IT CANNOT BE CONSTRUE D AS CAPITAL EXPENDITURE. IN VIEW OF THIS, WE ARE UNABLE TO UPH OLD THE ORDERS OF THE AUTHORITIES BELOW. THEREFORE, THE ORDERS OF BO TH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ADDITION MADE BY THE AS SESSEE IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 4 I.T.A. NO.297/MDS/17 ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPTEMBER, 2017 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 25 TH SEPTEMBER, 2017. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-5, CHENNAI-34 4. PRINCIPAL CIT-9, CHENNAI 5. 7: -2 /DR 6. ( ; /GF.