ACIT, CHENNAI V. R.K.Swamy BBDO (P) Ltd., CHENNAI

ITA 47/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9056 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-06-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 08-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DURAI PANDIAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Fair market value; Capital expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . ! ' , #'$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 47/MDS/2015 # % &% / ASSESSMENT YEAR : 2011-2012. THE ASSISTANT COMMISSIONER OF INCOME TAX, NCC-20 CHENNAI 600 034. VS. M/S. R.K. SWAMY BBDO(P) LTD, FILM CHAMBER BUILDING 604-606, ANNA SALAI CHENNAI 600 006. [PAN AACCR 2213F] ( / APPELLANT) ( /RESPONDENT) '( ) * / APPELLANT BY : SHRI. DURAI PANDIAN, ADDL. CIT, +,'( ) * /RESPONDENT BY : SHRI. S. SRIDHAR, ADVOCATE ! ) - / DATE OF HEARING : 23-06-2016 ./& ) - / DATE OF PRONOUNCEMENT : 30-06-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGA INST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, CHE NNAI IN ITA NOS. 2 & 1111/13-14, DATED 29.09.2014 FOR THE ASSESSMENT YEAR 2011-2012 PASSED U/S.143(3) AND 250 OF THE INCOME TAX ACT, 1 961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA NO.47/MDS/2015. :- 2 -: 2. THE FIRST GROUND RAISED BY THE REVENUE IS THAT COM MISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING AN ADDITI ON OF <56,86,250/- MADE TOWARDS EXCESS RENT PAID TO M/S. TIRUVENGADAM INVESTMENTS PRIVATE LTD WERE THE ASSESSEE HAS SUBSTANTIAL INT EREST. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S IN THE BUSINESS OF ADVERTISING LIKE TELEVISION, NEWSPAPER ETC., AND FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-2012 ON 29.0 9.2011 ADMITTING TOTAL INCOME OF <9,04,82,649/- AND RETURN OF INCOM E WAS PROCESSED U/S.143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS S ELECTED FOR SCRUTINY UNDER CASS AND THE NOTICES U/S.143 (2) AND 142 (1) OF THE ACT WERE ISSUED. IN COMPLIANCE TO NOTICES, THE LD. AUTHORIS ED REPRESENTATIVE OF ASSESSEE FILED THE DETAILS. THE LD. ASSESSING OFF ICER FOUND THAT THE ASSESSEES BOOKS OF ACCOUNT ARE MAINTAINED ON MERCA NTILE BASIS AND THE ASSESSEE HAS CLAIMED RENT PAID TO M/S. TIRUVEN GADAM INVESTMENTS PRIVATE LIMITED AGGREGATING <1,14,22,200/- AT ELPHI NESTONE CRICKET CLUB, MUMBAI <90,00,000/- KSITIJ NAPEAN SEA ROAD, M UMBAI <1,80,000/- AND PUSA ROAD, NEW DELHI <22,42,200/-. THE ASSESSEE HAS SUBSTANTIAL INTEREST IN THE PRIVATE LIMITED COMPAN Y AND ON PERUSAL OF THE AUDIT REPORT U/S.40A(2)(B) OF THE ACT, THE AUDI TOR HAVE MENTIONED ABOUT PAYMENTS MADE TO THE RELATIVE CONCERNS. THE L D. ASSESSING OFFICER IS OF THE OPINION THAT RENT PAID IS NOT REA SONABLE AND ONHIGHER ITA NO.47/MDS/2015. :- 3 -: RANGE ON COMPARING TO FAIR MARKET VALUE AND THE RE NTAL ADVANCES PROVIDED BY THE ASSESSEE COMPANY AND THE MARKET CON DITIONS AND LOCATION OF PROPERTIES AT MUMBAI AND DELHI AND TH E LD. ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE IN RESPECT OF RENT AND THE ASSESSEE HAS MADE SUBMISSIONS AS REFERRED AT PARA 2 OF HIS O RDER AS UNDER:- 'WE WOULD LIKE TO SUBMIT THAT THE, DISALLOWANCE HAS HAPPENED EARLIER BECAUSE AS PER IT DEPARTMENT'S CONTENTION THE RENT PAID IS HIGHER. THE IT DEPARTME NT TOOK THE HISTORICAL COST OF THE BUILDING FOR ARRIVING AT THE RENTS, IGNORING THE CURRENT MARKET REALITY AT THE TIME OF ASSESSMENT. THE RENTALS HAVE GONE UP IN LAST 15 YEARS. WE ATTACH THE LATEST REAT ESTATE QUOTE RECEIVED FROM MUMBAI REAL ESTATE CONTRACTOR TOWARDS RENT PER SQUARE FEET AT VARIOUS LOCATIONS IN MUMBAI IF YOU GO THROUGH THE SAME, THE RENT AT FORT AREA IS RANGING BETWEEN RS. 200 TO 275 PER SQUARE FEET, WHEREAS WE ARE PAYING A LENT OF RS. 192/-: PER SQ. FT. INCLUSIVE OF INTEREST FOR THE DEPOSIT. I ATTACH A CHART, WHICH CLEARLY SHOWS THE RENT WHAT WE ARE PAYING IN COMPARISON WITH THE MARKET RENT IS VERY LOW. THE IT DEPARTMENT SHOULD CONSIDER THE CURRENT MARKET REALI TY FOR THE RENTS AND ALIOW THE EXPENSES.' THE LD. ASSESSING OFFICER CONSIDERING THE SUBMISSIO NS AND RELIED ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF DEWAN DAULAT RAI KAPOOR VS. NEW DELHI MUNICIPAL COMMITTEE AND ANOTHE R (122 ITR 700) DISCUSSED ON THE VARIOUS ASPECTS OF APPLICABILITY O F THE RENT AND ALSO TENANCY AND DEFINITIONS OF THE STANDARD RENT AND RE ASONABLE RENT AND ITA NO.47/MDS/2015. :- 4 -: FINALLY CONCLUDED THAT THE ASSESSEES TRANSACTIONS ARE COVERED U/S.40A(2) OF THE ACT AND PROPERTIES ARE GOVERNED B Y PROVISIONS OF RENT CONTROL LEGISLATION AND DUE TO FIXATION OF ST ANDARD RENT, PAYMENT OF HIGHER RENT MORE THAN THE STANDARD RENT FIXED BY THE RENT CONTROL LEGISLATION IS UNREASONABLE OR EXCESSIVE AND THEREF ORE CONSIDERING RENT CONTROL LEGISLATION WHICH RECOGNIZES 8.5% RETU RN OF INVESTMENTS AS MEASURE OF STANDARD RENT AND THE LD. ASSESSING O FFICER RELIED ON THE DECISION OF ITO VS. CHEM MECH PVT. LTD 82 ITR 427(BOMBAY) AND CALCULATED 8.5% OF THE COST OF IMPUGNED PROPERTIES OF M/S. TIRUVENGADAM INVESTMENTS PRIVATE LIMITED BEING <1,3 3,49,490/- AND ALSO CALCULATED FAIR RENTAL VALUE OF MUMBAI AND DEL HI PROPERTY REFERRED AT PAGE 5 IN HIS ORDER IN COMPARISON AND DISALLOWE D RENT PAID OF <56,86,200/-. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INCOME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE ARGUED THE GROUNDS A ND EXPLAINED THE FACTS AND SITUATIONS OF PAYMENT OF RENT. THE LD. C OMMISSIONER OF INCOME TAX (APPEALS) HAS DISCUSSED ON THE FINDINGS OF THE LD. ASSESSING OFFICER AND WRITTEN SUBMISSIONS FILED BY THE ASSESSEE DATED 19.04.2014. THE LD. AUTHORISED REPRESENTATIVE HAS MENTIONED THAT THE DISALLOWANCE OF RENT DISPUTE CONTINUED FROM ASSESS MENT YEARS 1996 - ITA NO.47/MDS/2015. :- 5 -: 97 TO 2009-2010 BEFORE COMMISSIONER OF INCOME TAX ( APPEALS) AND THE HONBLE TRIBUNAL ALLOWED IN FAVOUR OF THE ASSE SSEE AND LD. COMMISSIONER OF INCOME TAX (APPEALS) RELIED ON ASSE SSEES OWN CASE IN ITA NO.1525/MDS/2013, DATED 20.09.2013 AND HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER:- 5.6. AFTER GOING THROUGH THE ASSESSMENT ORDERS, WRITTEN SUBMISSIONS AND GROUNDS, ORDERS OF THE CIT(APPEALS) AND HON'BLE ITAT, I FIND THAT THE FACTS RELATING TO THE PRESENT ASSESSMENT YEARS WHICH ARE NOW IN APPEAL AND THOSE IN WHICH THE CIT(A) AND THE ITAT HAVE PASSED ORDERS IN FAVOUR OF THE ASSESSEE ARE SIMILAR. IN SUCH CIRCUMSTANCES, FOLLOWING THE LAW OF PRECEDENCE RESPECTFULLY FOLLOWING THE SAME I ALLOW THE SECOND AND THIRD GROUNDS NAMELY, DISALLOWANCE OF DEEMED INTEREST AND DISALLOWANCE OF DEEMED INTEREST ON DEPOSITS RESPECTIVELY RAISED BY THE APPELLANT IN FAVOUR OF THE APPELLANT. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOM E TAX (APPEALS) THE REVENUE ASSAILED AN APPEAL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ARGU ED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DELETING THE ADDITION OF EXCESS RENT PAID AND THE ASSESSEE IS HA VING SUBSTANTIAL INTEREST AS DEFINED UNDER COMPANIES ACT BEING THE S AME MANAGEMENT. ITA NO.47/MDS/2015. :- 6 -: FURTHER, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS NOT APPRECIATED THE ACTION OF THE LD. ASSESSING OFFICER IS FAIR AND REASONABLE BY ADOPTING 8.5% INVESTMENTS OF TIPL AN D THE ITAT DECISION RELIED BY THE LD. COMMISSIONER OF INCOME T AX (APPEALS) HAS NOT BECOME FINAL AND IS BEING CONTESTED AT HIGHER F ORUMS AND PRAYED FOR ALLOWING THE APPEAL. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS ) ORDER AND OPPOSED THE GROUNDS. 7. WE HEARD RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND JUDICIAL DECISIONS. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ADDITION OF EXCESS RENT PAYMENT AND DI SCUSSED ELABORATELY IN HIS ORDER CONSIDERING THE ASSESSEES SUBMISSION S AND EARLIER ASSESSMENT YEARS FINDING OF THE TRIBUNAL. THE TRIB UNAL HAS HELD IN FAVOUR OF THE ASSESSEE IN ITA NO.1525/MDS/2013 DAT ED 29.09.2013 AND WAS DEALT BY THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IN PAGE 5 TO 8 OF HIS ORDER AND EARLIER YEARS ACCEPTED BY THE REVENUE. THE ONLY CONTENTION OF THE DEPARTMENT BEFORE THIS T RIBUNAL IS THAT THE REVENUE HAS NOT ACCEPTED THE ORDER OF TRIBUNAL AN D AN APPEAL HAS ALREADY BEEN FILED BEFORE HONBLE HIGH COURT AND TH E SAME IS PENDING ITA NO.47/MDS/2015. :- 7 -: BEFORE THE HIGH COURT. THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT MERE PENDENCY OF APPEAL BEFORE HONBLE HIGH COURT CANNOT BE A REASON TO TAKE A DIFFERENT VIEW. THE ORDER OF TRIB UNAL IS BINDING ON ALL THE AUTHORITIES IN THE STATE OF TAMIL NADU AND UNIO N TERRITORY OF PONDICHERRY. THEREFORE, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE BY FO LLOWING THE CO- ORDINATE BENCH DECISION OF ASSESSEES OWN CASE. TH EREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE GROUND OF THE REVENUE IS DISMISSED. 8. THE SECOND GROUND RAISED BY THE REVENUE WERE THE LD . COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING THE ADDITION OF <1,54,519/- AS EXCESS INTEREST FREE DEPOSIT MADE TO GROUP CONCERN. 9. THE LD. ASSESSING OFFICER FOUND THAT ASSESSEE HAS P AID RS.4,25,00,000/- AS RENTAL DEPOSIT TO THE OWNER M/S . TIRUVENGADAM INVESTMENTS PRIVATE LIMITED, WHILE DEPOSIT IS MORE THAN THE VALUE OF INVESTMENTS. THE LD. ASSESSING OFFICER RELIED ON T HE DECISION OF CIT VS. ABHISHEK INDUSTRIES LIMITED 286 ITR 1 AND HAS CALCULATED EXCESS INTEREST DISALLOWANCE IN RESPECT OF DELHI AND MUMBA I PROPERTY REFERRED AT PAGE 6 OF HIS ORDER BEING <1,54,519/-. AGGRIEVED BY THE ORDER, THE ITA NO.47/MDS/2015. :- 8 -: ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INC OME TAX (APPEALS). 10. IN THE APPELLATE PROCEEDINGS, THE LD.CIT(A) HAS DELETED THE DISALLOWANCE ON DEEMING INTEREST ON DEPOSITS R ELYING ON ASSESSEES OWN CASE. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE ASSAILED AN APPEAL BEFORE TRIBUNAL. 11. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ARGU ED THAT THE ASSESSEE HAS DIVERTED FUNDS TO SISTER CONCERN A ND THE LD. ASSESSING OFFICER IS RIGHT IN MAKING DISALLOWANCE A S BORROWED FUNDS WERE UTILIZED FOR PAYMENT OF DEPOSITS. FURTHER THE PROVISIONS OF SEC. 40A(2) OF THE ACT ARE ATTRACTED BEING THE ASSESSEE FIRM HAS PROVIDED HIGHER PERCENTAGE OF DEPOSIT COMPARED TO THE VALUE OF THE PROPERTY AND PRAYED FOR SET ASIDE THE CIT(A) ORDER. 12. THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) AND VEHEMENTLY OPPOSED THE GROUNDS. 13. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND JUDICIAL DECISION CITED. THE ISSUE OF I NTEREST ON RENTAL DEPOSITS HAVING NEXUS WITH RENT PAID. THE DISPUTE D ISSUE WAS DECIDED IN ASSESSEE OWN CASE IN ITA NO.1525/MDS/201 3, ASSESSMENT ITA NO.47/MDS/2015. :- 9 -: YEAR FOR 2009-2010 RELIED BY THE LD. COMMISSIONER O F INCOME TAX (APPEALS). THEREFORE, RESPECTFULLY FOLLOWING THE D ECISIONS OF CO- ORDINATE BENCH, WE UPHELD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) AND DISMISS THE GROUND OF THE REVENUE. 14. THE LAST GROUND RAISED BY THE ASSESSEE IS WITH REG ARD TO DISALLOWANCE OF DEPRECIATION ON LEASEHOLD IMPROVEME NTS OF <22,49,700/-. 15. IN THE SCRUTINY PROCEEDINGS, THE LD. ASSESSING OFF ICER FOUND THAT THE ASSESSEE HAS INCURRED EXPENDITURE ON LEASE HOLD PREMISES AND CLAIMED 100% DEPRECIATION AND SUPPORTED THE EXPEN DITURE WITH DETAILS AND STATEMENTS. THE LD. ASSESSING OFFICER IS OF THE OPINION THAT THE EXPENDITURE INCURRED ON LEASEHOLD IMPROVEMENTS ARE IN THE NATURE OF CAPITAL EXPENDITURE AND DEPRECIATION UNDER NORMA L RATES ARE APPLICABLE U/S.32(1) OF THE ACT AND DEPRECATION. T HE CONTENTION OF THE LD. AUTHORISED REPRESENTATIVE THAT 100% DEPRECIATIO N IS ALLOWABLE ON LEASEHOLD IMPROVEMENTS AT CORPORATE OFFICE AND MUMB AI OFFICE AND BEING PURELY TEMPORARY STRUCTURES. THE LD. ASSES SING OFFICER FOUND THAT THE TEMPORARY STRUCTURES ARE ELIGIBLE FOR 100% DEPRECIATION UNDER RULE I(4) TO PAR A APPENDIX I OF INCOME TAX RULES R .W.S 32(1) WHEREAS THE CLAIM OF THE EXPENDITURE DOES NOT HAVE THE CHAR ACTER OF TEMPORARY STRUCTURES AND CHARGED DEPRECIATION AT NORMAL RATE S AND DISALLOWED ITA NO.47/MDS/2015. :- 10 -: EVEN DEPRECATION OF <22,49,700/-. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INC OME TAX (APPEALS). 16. IN THE APPELLATE PROCEEDINGS, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE ASSESSEE COMPAN Y HAS SPENT FOR INTERIOR RENOVATION OF LEASE HOLD PROPERTY WERE THE LD. ASSESSING OFFICER FINDINGS ARE THAT SUCH EXPENDITURE ARE HAV ING ENDURING LIFE. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DISCUS SED THE ISSUE AND RELIED ON TRIBUNAL DECISION ON ASSESSEES OWN CASE IN ITA NOS.1765, 1766, 1767 & 2195/MDS/2006 FOR THE ASSESSMENT YEARS 1998-1999 TO 2000-2001 & 2003-2004 AND DELETED THE ADDITION. AGG RIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) T HE REVENUE ASSAILED AN APPEAL BEFORE TRIBUNAL. 17. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE ARGU ED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING EXCESS DEPRECATION OF <22,49,700/- WITHOUT CONSIDERING THE FINDINGS OF THE LD. ASSESSING OFFICER AND THAT THE EXPENDITURE ALSO IN CLUDE EXPENSES OF WOOD WORK AND FALSE CEILING AND THE SAME CANNOT BE CONSIDERED AS TEMPORARY STRUCTURES AND PRAYED FOR ALLOWING THE AP PEAL. ITA NO.47/MDS/2015. :- 11 -: 18. THE LD. AUTHORISED REPRESENTATIVE RELIED ON THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS) AND VEHEMENTLY OPPOSED THE GROUNDS. 19. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIA L ON RECORD AND JUDICIAL DECISION CITED. THE CRUX OF TH E ISSUE BEING DISALLOWANCE OF ASSESSEES EXCESS DEPRECATION ON LE ASEHOLD IMPROVEMENTS. IN THIS YEAR ALSO, THE ASSESSEE HAS INCURRED EXPENDITURE ON LEASEHOLD PREMISES WHICH THE LD. ASS ESSING OFFICER HAS DEALT IN HIS ORDER AND LD. COMMISSIONER OF INCOME T AX (APPEALS) RELIED ON THE ASSESSEES OWN CASE FOR EARLIER ASSESSMENT Y EAR REFERRED AT PAGE NO.3 & 4 OF HIS ORDER AND DELETED THE ADDITION . THE CONTENTION OF THE LD. DEPARTMENTAL REPRESENTATIVE THAT LD. COMMIS SIONER OF INCOME TAX (APPEALS) HAS NOT VERIFIED THE NATURE OF TEMPOR ARY STRUCTURES AND DELETED THE ADDITION. THE LD. AUTHORISED REPRESENT ATIVE SUBMITTED THAT THE EXPENDITURE IS PURELY IN THE NATURE OF TEMPORA RY STRUCTURES AND ELIGIBLE FOR 100% DEPRECATION AND WE FOUND THAT SIM ILAR ISSUE WAS CONSIDERED BY THE CO-ORDINATE BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2009-2010 IN ITA NO.1525/MDS/2013 A ND THE TRIBUNAL AT PARA 11 AT PAGE 8 OBSERVED AS UNDER: 11. NOW, WE COME TO THE ISSUE OF DEPRECIATION. TH ERE IS NO STRIFE BETWEEN THE PARTIES THAT THE ASSESSEE IS LESSEE, TOOK ON LEASE A PROPERTY IN MUMBAI. IT HAD INCURRED THE EXPENSES IN QUESTION OF WOODEN WORK, PREMISES ITA NO.47/MDS/2015. :- 12 -: EXPANSION, FALSE CEILING ETC AND CLAIMED DEPRECIATI ON AT THE RATE OF 100% FOR A SUM OF 54,92,416/-. THE ASSESSING OFFICER DISALLOWED A SUM OF 16,83,295/- BY HOLDING THAT THE SAME HAD BEEN INCURRED FOR TEMPORA RY STRUCTURE. THE ASSESSEE HAD STRONGLY PLACED RELIANC E ON EXPLANATION(1) OF SEC.32(1) OF THE ACT. UNDISPUTEDL Y, THE SAID STATUTORY PROVISION TREATS EVEN A LESSEE INCUR RING CAPITAL EXPENDITURE FOR THE PURPOSE OF BUSINESS AN D PROFESSION IN THE CONSTRUCTION OF RAISING ANY STRU CTURE ETC OR RENOVATION AT PAR WITH THE OWNER OF THE BUILDING . THE ONLY CONTENTION OF THE REVENUE IS THAT THE EXPENDIT URE WAS NOT INCURRED FOR RAISING TEMPORARY STRUCTURE AS STIPULATED IN THE DEPRECIATION SCHEDULE. WE FIND FR OM THE RELEVANT CASE LAW QUOTED BY THE REVENUE(SUPRA) THAT THEREIN, NO DETAILS WERE FORTHCOMING ABOUT THE NATU RE OF EXPENSES INCURRED. THEREFORE, THE SAID CASE LAW IS NOT APPLICABLE IN THE FACTS OF THE CASE. HENCE, KEEPING IN MIND THE FACT THAT THE ASSESSING AUTHORITY HIMSELF HAD ALLOWED MAJORITY OF THE EXPENSES AS ENTITLED FOR 10 0% DEPRECIATION, WE HOLD THAT THE REST OF THE EXPENSES OF FALSE CEILING, EXPANSION OF PREMISES AND WOODEN WOR K ARE PURELY TEMPORARY STRUCTURES AND COVERED BY THE HIGHER RATE OF DEPRECIATION BEING PURELY TEMPORARY ERECTIONS. IN OUR CONSIDERED OPINION, THE REVENUE H AS PROCEEDED TO INTERPRET THE DEPRECIATION SCHEDULE IN A NARROW MANNER. WE REITERATE THAT THE SCHEDULE OF DEPRECIATION, DESERVES TO BE LIBERALLY INTERPRETED AND THE EXPRESSIONS USED PURELY TEMPORARY ERECTIONS SUCH A S WOODEN STRUCTURES HAVE TO BE TREATED AS INCLUSIVE IN NATURE COVE RING ALL TEMPORARY ERECTIONS. THE WORDS SUCH AS THEMSELVES POINT THAT THE LATTER PORTION OF THE SENTENCE ONLY SUPPLEMENTS THE FORMER ONE AND DOES N OT HAVE OVERRIDING EFFECT ON THE MAIN PART. PROCEEDING ON ITA NO.47/MDS/2015. :- 13 -: THIS REASONING, WE HOLD THAT THE SAID CLAUSE NOT ON LY COVERS WOODEN STRUCTURES OF PURELY TEMPORARY ERECTI ON, BUT ALSO INCLUDES FALSE CEILING AS WELL AS WOODEN W ORKS. HENCE, WE ACCEPT THE CONTENTIONS OF THE ASSESSEE AN D UPHOLD THE FINDINGS OF THE COMMISSIONER OF INCOME T AX (APPEALS) UNDER CHALLENGE. WE RESPECTFULLY, FOLLOWING THE DECISION OF CO-ORDI NATE BENCH, DISMISS THE GROUND OF THE REVENUE. 20. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.47/MDS/2015 IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 30TH DAY OF JU NE, 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ' ) (G. PAVAN KUMAR) /JUDICIAL MEMBER / CHENNAI 2 / DATED: 30.06.2016 KV 3 ) +#-45 65&- / COPY TO: 1 . '( / APPELLANT 3. ! 7- () / CIT(A) 5. 5 9: +#-# / DR 2. +,'( / RESPONDENT 4. ! 7- / CIT 6. :% ; / GF