DCIT 8(2), MUMBAI V. RAGHUNANDAN S KAMTH, MUMBAI

ITA 4653/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2193 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 02-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: UDAY B JAKKE
• Assessee Lawyers: ADITYA KUMAR
• Keywords: Onus to prove; Revenue expenditure; Capital expenditure

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI . . , , BEFORE S/SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, J UDICIAL MEMBER ./ I.T.A. NO. 4653 /MUM/ 2013 ( / ASSESSMENT YEAR : 2009 - 10 ) DY.COMMISSIONER OF INCOME TAX 8 - (2), ROOM NO.209, 2 ND FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 / VS. SHRI RAGHUNANDAN S KAMATH SHOP NO.1, N - 2, GRACE APARTMENTS N S ROAD NO.13, JUHU, MUMBAI - 400049 ./ PAN : ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI UDAY B JAKKE / RESPONDENT BY : SHRI ADITYA KU MAR / DATE OF HEARING : 2 .12. 2015 / DATE OF PRONOUNCEMENT : 9. 12. 2015 O R D E R PER B.R.BASKARAN,AM : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 29.11.2012 PASSED BY LD CIT(A) - 17, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2009 - 10. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN HOLDING THAT THE REPAIRS AND MAINTENANCE EXPENSES INCURRED BY THE ASSESSEE IS ALLOWABLE AS REVENUE EXPENDITURE. 2. THE ASSESSEE IS THE PROPRIETOR OF TWO CONCERNS BY NAME M/S NATURAL ICE CREAM AND M/S LANDS FLAVOUR. BOTH THE CONCERNS ARE SELLING ICE CREAMS. BESIDES THE ABOVE, THE ASSESSEE IS DRAWING SALARY FROM M/S ITA NO 4653 / MUM/ 2013 2 KAMATHS OURTIME ICE CREAMS P LTD AND ALSO RUNNING HO TEL & REORT IN THE NAME OF LAND FLAVOURS AT MANGALORE. THE ASSESSEE CLAIMED A SUM OF RS.34.40 LAKHS UNDER THE HEAD REPAIRS AND MAINTENANCE EXPENSES IN HIS PROPRIETARY CONCERN NAMED M/S NATURAL ICE CREAMS. THE ASSESSEE CLAIMED TO HAVE INCURRED REPAIRS A ND MAINTENANCE EXPENDITURE IN RENOVATION OF TWO ICE CREAMS SHOP. THE ASSESSING OFFICER TOOK THE VIEW THAT THE EXPENDITURE INCURRED ON RENOVATION WILL GIVE AN ENDURING BENEFIT TO THE ASSESSEE AND ACCORDINGLY DISALLOWED THE ABOVE SAID CLAIM BY TREATING THE SAME AS CAPITAL EXPENDITURE. THE LD CIT(A), HOWEVER, ALLOWED THE CLAIM OF THE ASSESSEE AND HENCE THE REVENUE HAS FILED THIS APPEAL BEFORE US. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. AT THE TIME OF HEARING, THE LD A.R SUBMITTED THAT THE AREA OF TWO SHOPS IS AROUND 700 SQ.FT., MEANING THEREBY, THE AVERAGE EXPENSES INCURRED BY THE ASSESSEE PER SQ.FT. WORKS OUT TO RS.5,000/ - . WE ARE OF THE VIEW THAT THE LD CIT(A) WAS RIGHT IN PRINCIPLE IN HOLDING THAT THE RENOVATION EXPENSES SHALL BE ALL OWABLE AS REVENUE EXPENDITURE, SINCE HIS VIEW IS SUPPORTED BY VARIOUS DECISIONS RELIED UPON BY HIM AND ALSO RELIED UPON BY THE LD A.R BEFORE US. 4. THERE SHOULD NOT BE ANY DOUBT THAT THE BURDEN TO PROVE THE NATURE OF EXPENSES LIES UPON THE ASSESSEE. THE AVERAGE RATE OF REPAIR EXPENSES INCURRED BY THE ASSESSEE WAS RS.5,000/ - AND HENCE IT IS THE RESPONSIBILITY TO PROVE THAT THE RENOVATION OF THE SHOPS HAVING AN AGGREGATE AREA OF 700 SQ.FT. COSTED THAT MUCH. FURTHER, THE ASSESSING OFFICER DID NOT HAVE O CCASION TO EXAMINE THE NATURE OF REPAIRS EXPENSES CLAIMED BY THE ASSESSEE, SINCE HE TOOK THE VIEW THAT THE SAME IS TO BE TREATED AS CAPITAL EXPENDITURE. ACCORDINGLY, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER. AT THE SAME TIME, WE WISH TO REITERATE THAT THE EXPENDITURE INCURRED ON RENOVATION ALONE IS ALLOWABLE AS REVENUE EXPENDITURE. ACCORDINGLY, WE SET ASIDE THE ORDER OF ITA NO 4653 / MUM/ 2013 3 LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFF ICER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE WITH THE NATURE AND PURPOSE OF EXPENSES INCURRED, NATURE OF WORK CARRIED ON BY THE ASSESSEE IN THE TWO SHOPS, THE RENOVATION PLAN PREPARED BY THE ENGINEER/ARCHITECT AND SUCH OTHER DETAILS THAT MA Y BE FOUND TO BE NECESSARY. BASED ON SUCH EXAMINATION, THE ASSESSING OFFICER MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRON OUNCED IN THE OPEN COURT 9TH ,DEC, 2015 . SD SD ( / SANDEEP GOSAIN) ( . . / B.R.BASKARAN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI ; DATED .. 9TH , DEC,2015 . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI