M/s Chandigarh Bottling Co., Chandigarh V. ACIT, C-2(1), Chandigarh

ITA 475/CHANDI/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5997 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 14-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Assessee Lawyers: VINEET KHUR ANA
• Keywords: Capital asset; Condonation of delay; Revenue expenditure; Capital expenditure
• Section: 143(3); 205

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “A”, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER आयकर अपील सं./ ITA Nos. 475 & 476/CHD/2019 नधा रण वष / Assessment Year : 2012-13 & 2013-14 M/s Chandigarh Bottling Co., Plot No. 177-F, Industrial Area, Phase-1, Chandigarh बनाम The Asstt. Commissioner of Income Tax, Circle- 2(1), Chandigarh थायी लेखा सं./PAN NO: AADFC 1839 Q अपीलाथ /Appellant यथ /Respondent आयकर अपील सं./ ITA No. 477/CHD/2019 नधा रण वष / Assessment Year : 2014-15 M/s Chandigarh Bottling Co., Plot No. 177-F, Industrial Area, Phase-1, Chandigarh बनाम The Income Tax Officer, Ward-2(1), Chandigarh थायी लेखा सं./PAN NO: AADFC 1839 Q अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Tej Mohan Singh, Adv. & Sh. Vineet Khurana, CA राज व क ओर से/ Revenue by : Smt. Priyanka Dhar, Sr. DR स ु नवाई क तार#ख/Date of Hearing : 28.07.2022 उदघोषणा क तार#ख/Date of Pronouncement : 18 .08.2022 आदेश /Order Per Sudhanshu Srivastava, Judicial Member: All the three above captioned appeals have been preferred by the assessee as per the following details:- 2 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh S.No. ITA No. A.Y. CIT(A)- Chandigarh order dated 1 475/Chd/2019 2012-13 11.02.2019 2 476/Chd/2019 2013-14 11.02.2019 3 477/Chd/2019 2014-15 11.02.2019 2.0 Since all these three appeals involve an identical issue, they were heard together and are being disposed off through this common order for the sake of convenience. 2.1 The brief facts of the case are that the assessee firm is primarily engaged in the business of trading in soft drinks / aerated water etc. The return of income for assessment year 2012-13 (ITA No.475/Chd/2019) was filed declaring income of Rs. 32,71,954/- and the assessment was completed at an income of Rs. 2,05,25,890/- after making an addition of Rs. 9,92,069/- on account of disallowance of expenses relating to advertisement and publicity, sales promotion, commission and incentive @ of 25% of the total of such expenses on estimate basis and a further addition of Rs. 3 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh 1,62,61,867/- being disallowance of amount of Conversion Charges of Land Use paid to the Chandigarh Administration and claimed as Revenue expenditure by the assessee. In assessment year 2013-14 (ITA 476/Chd/2019,) the return of income was filed declaring a loss of Rs. 16,74,952/- and the assessment was completed at an income of Rs. 1,50,72,323/- after making a disallowance of Rs. 4,85,408/- being 25% of expenditure disallowed on estimate basis with respect to advertisement and publicity and sales promotion and a further disallowance of Rs. 1,62,61,867/- being the charges paid towards Conversion of Land Used (CLU) paid to Chandigarh Administration and claimed by the assessee as being Revenue in nature. In assessment year 2014-15 (ITA No. 477/Chd/2019), the return of income was filed declaring a loss of Rs. 14,50,306/- and the assessment was completed at an income of Rs. 1,54,82,950/- after making addition of Rs. 1,62,61,867/- being charges paid towards Conversion of Land Used to Chandigarh Administration and claimed as Revenue expenditure by the assessee and another disallowance of 4 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh Rs. 2,38,643/- being 25% disallowance on estimate basis out of advertisement and publicity expenses and a futher disallowance of Rs. 4,32,749/- being 25% disallowance on estimate basis out of Sales Promotion Expenditure. 2.2 Aggrieved, the assessee carried the three assessments before the Ld. First Appellate Authority challenging the additions / disallowances and vide common order dated 11.02.2019 (the impugned order), the Ld. CIT(A) deleted the disallowances made by the AO on estimate basis but partly confirmed the disallowances in all the three years in respect of charges paid towards Conversion of Land Use as under:- 1. Assessment year 2012-13 Rs. 1,05,43,049/- 2. Assessment year 2013-14 Rs. 1,13,17,712/- 3. Assessment year 2014-15 Rs. 1,21,56,285/- 2.3 The Ld. CIT (A) proceeded on the reasoning that only the interest portion in every year was to be allowed as Revenue expenditure whereas the principal amount was to be treated as capital expenditure. 5 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh 2.4 Against this adjudication by the Ld. CIT(A), the assessee has now approached the Tribunal and has raised the following grounds of appeal in the three captioned assessment years as under:- ITA No. 475-Chd/2019 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in sustaining the addition of Rs.1,05,43,049/- treating the Principal amount paid to Chandigarh Administration towards CLU to be a capital expenditure as against revenue expense which is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has without appreciating the facts as placed before him in the right perspective upheld the addition which is arbitrary and unjustified. 3. That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable.” ITA No. 476/Chd/2019 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in sustaining the addition of Rs.1,13,1,712/- treating the Principal amount paid to Chandigarh 6 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh Administration towards CLU to be a capital expenditure as against revenue expense which is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has without appreciating the facts as placed before him in the right perspective upheld the addition which is arbitrary and unjustified. 3. That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable. ITA No. 477/Chd/2019 1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on facts in sustaining the addition of Rs.1,21,56,285/- treating the Principal amount paid to Chandigarh Administration towards CLU to be a capital expenditure as against revenue expense which is arbitrary and unjustified. 2. That the Ld. Commissioner of Income Tax (Appeals) has without appreciating the facts as placed before him in the right perspective upheld the addition which is arbitrary and unjustified. 3. That the order of the Ld. CIT(A) is erroneous, arbitrary, opposed to the facts of the case and thus untenable.” 7 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh 3.0 At the outset, the Ld. Authorized Representative submitted that as per the intimation received from the Registry, all the three appeals wee time barred by 1013 days. The Ld. AR submitted that the assessee has already filed applications for Condonation for Delay along with affidavits by Shri Vikramjeet Singh Kandhari, partner of the assessee firm, and submitted that in fact, there has been no delay in filing of the appeals before the Tribunal and the only reason why these appeals were being considered as having not been filed within the limitation period was that the assessee had earlier deposited the Challans towards the appeal fees under the wrong head “Tax on Regular Assessment (400)” instead of the correct head “Self Assessment Tax (300)”. It was further submitted that due to this reason the Registry of the Tribunal has issued Defect Memos to rectify the Challan Codes and, thereafter, the assessee had approached the Assessing Officer on three various dates i.e. on 03.09.2019, 23.10.2019 and 03.11.2021 for rectification of the said Codes but the AO did not take 8 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh any action in this regard and, therefore, the assessee firm had no other option but to deposit the appeal fees again vide Challans dated 14.02.2022. It was submitted that, thus, there was no actual delay in filing of the appeals and the delay, if any, was only due to the fact that the Challans had been earlier deposited against the wrong tax Code. It was prayed that, thus, there being no deliberate fault on the part of the assessee, the appeals should be admitted for being heard on merits after the condonation of delay. 4.0 Per Contra, the Ld. Sr. DR opposed the assessee’s applications for condonation of delay. 5.0 Having heard both the parties on the issue of condonation of delay and after going through the two set of Challans deposited by the assessee, i.e. first on 03.04.2019 and later on 14.02.2022 and the averments made by the partner of the assessee’s firm in the affidavit, we agree with the contentions of the Ld. AR that the delay, if any, was only due to an honest mistake on the part of the assessee while filling up the relevant 9 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh Tax Code in the Challans for depositing the appeal fee before this Tribunal. Therefore, there is no reason for us for not condoning the aforesaid delay of 1013 days. Accordingly, we condone the delay and admit the three appeals for the purpose of regular hearing. 5.0 Arguing on the sole ground (identical in all the three years) before us, the Ld. AR submitted that in all the three assessment years, the AO has disallowed the assessee’s claim of expenditure of Rs. 1,62,61,867/- as being capital in nature which was incorrect application of law on the facts and circumstances of the case. It was submitted that the assessee had paid these charges for Conversion of Land Use from industrial to commercial only on being required by the Chandigarh Administration to do so. It was submitted that the Chandigarh Administration had on his own decided to change the policy which had been earlier in place for approximately forty years and had re-classified the assessee’s business activity as commercial activity requiring the assessee to pay charges for Conversion of Land Use. It was submitted that, thus, this payment was thrust upon the 10 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh assessee and the conversion was not made at the behest and request of the assessee and, therefore, the assessee had no option but to comply with the directions of the Chandigarh Administration for the simple reason that had the assessee not accepted and complied with the directions of the Chandigarh Administration, the plot of land might have been taken over by the Chandigarh Administration as per the new Rules. 6.1 Giving the background of the factual matrix leading to the controversy, the Ld. AR submitted that the plot in question was allotted to the assessee firm for use as an industrial plot. In 1969, the business was commenced as a franchisee bottler of Parle India Pvt. Ltd by installation of factory in the said plot. Subsequently, with the acquisition of Parle India Bottlers by Coca Cola (India), the bottling business was taken over by M/s Kandhari Beverages Pvt. Ltd. and the assessee firm became the distributors of that company with the result that the manufacturing activities were discontinued and they were replaced by trading activities. It was further submitted that, subsequently, in the year 2005, the 11 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh Chandigarh Administration notified that the activity on the industrial plots should be the same for which the plot had originally been allotted or else the land used should be changed from Industrial to Commercial. It was submitted that in this background the assessee was advised to get the land use changed from Industrial to Commercial since the plot had originally been allotted for industrial use. It was futher submitted by the Ld. AR that, therefore, in accordance with the directions of the Chandigarh Administration, the assessee opted for filing an application for Change in Land Use and the application was accepted by the Chandigarh Administration vide communication 03.10.2008 and the assessee company was allowed to pay the charges for Change in Land Use in installments as prescribed in the sanction letter. 6.2 The Ld. AR submitted that since the benefit being received was of not enduring nature, the assessee company decided to write off as Revenue expenditure, the annual installments as fixed by the Chandigarh Administration. It was further submitted that, thus, it is 12 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh apparent that the charges paid for the Change of Land Use were in the nature of fee only and no new asset had been created requiring the assessee company to capitalize the same. The fee paid was only towards the removal of hurdles and disabilities attached to the properties which was so required for the purpose of running the business of the assessee firm smoothly and the same was not paid for creation of any assets at all. It was submitted that while deciding on the issue of deductibility or otherwise of an item of expenditure as Revenue expenditure, the circumstances under which the same is incurred is necessarily to be considered. It was emphasized that in the present case the business was being run by the assessee since 1969 and since the nature of the business had changed from manufacturing to trading, therefore, in view of the notification issued by the Chandigarh Administration, the assessee was bound to pay fees towards Change in Land Use in order to retain the possession of the plot and for removal of any restrictions / obstructions or disabilities. 13 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh 6.3 The Ld. AR also submitted that even the Income Tax Department, in earlier assessment year 2009-10, had examined this issue and had specifically allowed the assessee’s claim in assessment proceedings completed u/s 143(3) of the Act. It was submitted that, therefore, even on the basis of principle of consistency, the assessee’s case deserved to be allowed. 6.4 The Ld. AR also placed reliance on numerous case laws in support of his contention that since no capital asset had been created or acquired and the expenditure had a direct nexus / connection and relation to the carrying on of the business and the same was an integral part of the profit making process, the impugned expenditure was undoubtedly Revenue in nature. He prayed that the assessee’s claim should be allowed. 7.0 In response, the Ld. Sr. DR vehemently supported the orders of the authorities below and argued that the payment of charges for Change in Land Use brought an enduring benefit to the assessee and, therefore, the lower authorities were legally correct in holding the same 14 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh as capital expenditure. It was further submitted that although, the assessee’s claim might have been allowed by the AO in earlier assessment year, it was settled law that principle of res judicata did not apply in Income tax Proceedings. The Ld. DR submitted that the charges paid for Change in Land Use, although, paid in installments by the assessee, were in the nature of onetime payment resulting in benefit to the assessee in the form of protection from being evicted from the plot of land. It was submitted that such charges were not recurring charges but were in the nature of ‘once and for all’ and, therefore, keeping in view the various judgements of the Hon'ble Apex Court ,as have been quoted and relied upon by the Ld. CIT(A) in the impugned order, the Revenue had a very strong case in its favour. Our attention was drawn to a judgement of the Hon'ble Delhi High Court in the case of M/s Hotel Shiv Vs. Commissioner of Income Tax, New Delhi in W.P(C) No. 3094 of 2013 wherein, vide order dated 21.02.2014, the Hon'ble Delhi High Court, in the case of a firm claiming expenditure on conversion charges under Mixed Land Use Policy and debiting the 15 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh same to the profit and loss account, had held that the nature of expenditure was capital in nature. The Ld. Sr. DR vehemently argued that the appeal of the assessee deserved to be dismissed. 8.0 We have heard the rival submissions and have also perused the material on record. The facts of the case are not in dispute. The only question for our consideration in all the three years under appeal is whether the charges paid by the assessee for Change in Land Use in installments over a period of 10 years was deductible as Revenue expenditure or were in the nature of Capital Expenditure as has been held by the lower authorities. It is an admitted fact that the assessee had commenced its business on the said plot in the year 1969 and since then the business has been continuously going on although the nature of business has changed from manufacturing to trading once Parle India Bottlers were acquired by Coca Cola (India). It is also undisputed that the assessee had never applied for Change in Land Use at its non behest and it was only when the Chandigarh Administration changed its policy regarding 16 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh Industrial Plots and notified that all enterprises carrying on trading business should apply for Change in Land Use from industrial to commercial that the assessee applied for Change in Land Use. It is also undisputed that the assessee, when it was operating a bottling plant, qualified under an Industrial Activity and it is only for the purpose of retaining the possession of the plot that the assessee had to apply for Change in Land Use. Although, the charges for Change in Land Use are considered to be a one time payment, all the same, the essential question that arises is as to whether the assessee has acquired any capital asset by paying charges for conversion of land use. Although, it cannot be denied that an enduring benefit in the form of permission to continue with the possession of the plot accrues to the assessee, but all the same, by no stretch of imagination can it be inferred that any capital asset has been acquired or has been created so as to classify the expenditure as capital asset. 8.1 No doubt, the judgement of the Hon'ble Delhi High Court in the case of M/s Hotel Shiv Vs. CIT (supra) has 17 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh held that the payment of conversion charges would be capital expenditure. However, the said judgement of the Hon'ble Delhi High Court has to be read in context with the facts of that particular case only. In this case, the owners of the property were partners in their individual capacities and the Hon'ble Delhi High Court observed that the enduring benefit of conversion from residential to commercial would enure to the owners. The Hon'ble Delhi High Court futher observed that in case the assessee i.e. the partnership firm, were to discontinue its business, even then, the partners (the owners of the property) in their individual capacity would still have the right to put the property to commercial / mixed land used. The Hon'ble Delhi High Court went on to hold that, thus, this expenditure was capital expenditure as it had brought about an advantage of an enduring nature which was attached to the said property. However, the facts of the case before us are on an entirely different footing altogether. In the present case, the assessee firm stood to lose its right of possession of the said plot had it not accepted the directions of the Chandigarh Administration 18 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh to pay charges towards conversion of land use. Thus, it was the fear of eviction and the hope of permission to continue its running business that the assessee firm appliedfor and, subsequently, paid the conversion charges. In our considered view, this payment does not create any capital asset nor does it provide any enduring benefit to the assessee firm except for the assurance that the assessee firm would be permitted to retain the possession of the said plot for its day to day running of business operations. This, essentially, falls under the ambit of Revenue expenditure and we respectfully state that the judgement of the Hon'ble Delhi High Court in the case of Hotel Shiv Vs. CIT (supra) is distinguishable on facts. 8.2 We, rather, are placing our reliance on the judgement of the Hon'ble Punjab & Haryana High Court (the jurisdictional High Court ) in the case of CIT Vs. Suri Sons reported in (189) 177 ITR 406 (P&H), whose facts are more akin to the facts in the present case. The Hon'ble Punjab & Haryana High Court was considering the question whether the Municipal Taxes paid for a plot 19 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh of land although the business had yet to be commenced would qualify as Revenue expenditure or capital expenditure and the Hon'ble High Court held that the Municipal Tax paid was not for acquisition of any business asset but for retention of the same and, therefore, would be allowable as business expenditure u/s 37 of the Act. 8.3 We are also guided by the judgement of the Hon'ble Apex Court in the case of Bikaner Gpysums Ltd. Vs. CIT reported in (1991) 187 ITR 39 (SC) wherein, the Hon'ble Apex Court held that where the assessee has an existing right to carry on the business, any expenditure made by it during the course of business for the purpose of removal of any restriction or obstruction or disability would be on Revenue account, provided the expenditure does not result in acquiring any capital asset. The Hon'ble Apex Court went on to hold that payments made for removal of restrictions, obstruction or disability may result in acquiring benefits to the business, but that by itself would not acquire any capital asset. The Hon'ble Apex Court also cautioned that the facts of the each case 20 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh have to be borne in mind in considering the question having regard to the nature of business, its requirements and the nature of the advantage in a commercial sense. 8.4 It would be relevant at this juncture to quote the following observations of the Hon'ble Apex Court in the judgement of Bikaner Gypsms Ltd Vs. CIT (supra) wherein the Hon'ble Apex Court has approved the judgement in the case of Commissioner of Inland Revenue Vs. Carron Company (1968) 45 TC18 and also its judgement in the case of Empire Jute Company Vs. CIT (1980) 124 ITR 1 (SC) as under:- “Whether payments made by an assessee for removal of any restriction or obstacle to its business would be in the nature of capital or revenue expenditure has been considered by courts. In Commissioners of Inland Revenue v. Carron Company [1968] 45 TC 18, the assessee carried on the business of ironfounders which was incorporated by a charter granted to it in 1773 By passage of time, many of its features had become archaic and unsuited to modern conditions and the company's commercial performance was suffering a progressive decline. The charter of the company placed a restriction on the company's borrowing powers and it placed restrictions on voting rights of certain members. The company decided to 21 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh petition for a supplementary charter providing for the vesting of the management in a board of directors and for the removal of the limitation on the company's borrowing powers and restrictions on the issue and transfer of shares. The company's petition was contested by dissenting shareholders in court. The company settled the litigation under which it had to pay the cost of legal action and buy out the holdings of the dissenting shareholders and, in pursuance thereof, a supplementary charter was granted. In assessment proceedings, the company claimed deduction of payments made by it towards the cost of obtaining the charter, the amounts paid to the dissenting shareholders and expenses in the action. The Special Com missioners held that the company was entitled to the deductions. On appeal, the House of Lords held that since the object of the new charter was to remove the obstacles to profitable trading, and the engagement of a competent manager and the removal of restrictions on borrowing facilitated the day-to-day trading operation of the company, the expenditure was on income account. The House of Lords considered the test laid down by Lord Cave L. C. in British Insulated Company's case [1926] AC 205 (HL), and held that the payments made by the company were for the purpose of removing the disability in the company's trading operation which prejudiced its operation. This was achieved without the acquisition of any tangible or intangible asset or without creation of any new branch of trading activity. From a commercial and business point of view, nothing in the nature of an additional fixed capital asset 22 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh was thereby achieved. The court pointed out that there is a sharp distinction between the removal of a disability on the one hand, payment for which is a revenue payment, and the bringing into existence of an advantage, payment for which may be a capital payment, on the other. Since, in the case before the court, the company had made payments for removal of the disabilities which confined their business under the out of date charter of 1773, the expenditure was on revenue account. In Empire Jute Co. v. CIT [1980] 124 ITR 1, this court held that the expenditure incurred by an assessee for the purpose of removing the restriction on the number of working hours with a view to increase its profits, was in the nature of revenue expenditure. The court observed that if the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the asses see's business to be carried on more efficiently or more profitably while leaving the fixed capital untouched, the expenditure would be on revenue account even though the advantage may endure for an indefinite future. We agree with the view taken in the aforesaid two decisions. In our opinion, where the assessee has an existing right to carry on a business, any expenditure made by it during the course of business for the purpose of removal of any restriction or obstruction or disability would be on revenue account, provided the expenditure does not acquire any capital asset. Payments made for removal of restriction, obstruction or disability may result in acquiring benefits to the business, 23 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh but that by itself would not acquire any capital asset.” 8.5 Therefore, on the facts of the present case and respectfully following the ratio laid down by the Hon'ble Apex Court in the case of Bikaner Gypsms Ltd Vs. CIT (supra) and the ratio of the judgement of the Hon'ble jurisdictional Punjab & Haryana High Court in the case of CIT Vs. Suri and sons (supra), we are of the considered opinion that the impugned amounts in all the three years under appeal, i.e. the charges paid for Conversion of Land Use are essentially Revenue in nature and the same are deductible u/s 37 of the Act for the simple reason that the said expenditure was necessary from the point of view of the assessee to keep its business in running condition by removing fetters and obstacles which might have come in its way in the form of being evicted from the plot of land on which it was carrying on business since the year 1969. We, accordingly, set aside the order of the Ld. CIT(A) and direct the AO to allow benefit of deduction of these amounts u/s 37 of the Act. 24 475, 476 & 477-Chd-2019 (A.Y. 2012-13, 2013-14 & 2014-15) – M/s Chandigarh Bottling Co., Chandigarh 9.0 In the final result, all the three appeals of the assessee stands allowed. Order pronounced on 18.08.2022. Sd/- Sd/- ( N. K. SAINI) (SUDHANSHU SRIVASTAVA) Vice President Judicial Member Dated : 18.08.2022 “आर.के .” आदेशक त*ल+पअ,े+षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु -त/ CIT 4. आयकरआय ु -त (अपील)/ The CIT(A) 5. +वभागीय त न0ध, आयकरअपील#यआ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar