DCIT 2(3)(2), MUMBAI V. SATGURU INFOCORP SERVICES P.LTD, MUMBAI

ITA 5293/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0299 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Depreciation; Opportunity of being heard; Principle of natural justice; Question of law; Revenue expenditure; Capital expenditure
• Section: 143(3)

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 5293/ MUM/2015 ( / ASSESSMENT YEAR : 2011-12) DCIT 2(3)(2), ROOM NO. 552,5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. / V. M/S SATGURU INFOCORP SERVICES PVT. LTD., 5 TH FLOOR, SUNTEK CENTRE, SUBHASH ROAD, VILE PARLE (E), MUMBAI 400 057. ./ PAN : AAECS6683A ( / APPELLANT ) .. ( / RESPONDENT ) REVENUE BY : SHRI V JUSTIN ASSESSEE BY : SHRI RAKESH JOSHI / DATE OF HEARING : 09.08.2017 / DATE OF PRONOUNCEMENT : 16.08.2017 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 5 293/MUM/2015, IS DIRECTED AGAINST THE APPELLATE ORDER DATED 26 TH AUGUST, 2015 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 6, MU MBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2011-12, APPELLA TE PROCEEDINGS BEFORE LEARNED CIT(A) HAD ARISEN FROM THE ASSESSMENT ORDER DATED 25 TH FEBRUARY, 2014 PASSED BY LEARNED ASSESSING OFFICER( HEREINAFT ER CALLED THE AO) U/S 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CAL LED THE ACT) . ITA 5293/MUM/2015 2 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IN T HE MEMO OF APPEAL FILED WITH THE INCOME-TAX APPELLATE TRIBUNAL, MUMBA I (HEREINAFTER CALLED THE TRIBUNAL) READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT{A} HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW : 1. THE ORDER OF THE CIT{A} IS OPPOSED TO LAW AND FA CTS OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT{A} HAS ERRED IN DELETING THE DISALLOWANCE O F REPAIRS AND MAINTENANCE EXPENSES RELATING TO FURNITURE AND FIXT URE INCURRED FOR CREATING NEW CABINS AND WORK STATIONS HOLDING T HE SAME TO BE REVENUE EXPENDITURE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT{A} HAS ERRED IN HOLDING THAT THE ISSUE HAS BEEN DECIDED IN THE EARLIER YEARS IN FAVOUR OF THE ASSESSEE, WHEN I N FACT, THE ITAT FOR AY 2005-06 & 2006-07 HAS REMITTED THE ISSUE BAC K TO THE AO. 4. FOR THESE AND OTHER GROUNDS THAT MAY URGED AT TH E TIME OF HEARING AND DECISION OF THE CIT{A} MAY BE SET ASIDE AND THAT OF THE AO RESTORED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF BUSINESS CENTRE AND ALL OTHER ANCIL LARY SERVICES. THE ASSESSEE COMPANY HAS ENTERED INTO A JOINT VENTURE AGREEMENT WITH MMTC LTD. ON 15- 10-2009 WHICH IS VALID FOR 15 YEARS TO CARRY ON BUS INESS OF RUNNING A BUSINESS CENTRE KNOWN AS 'SUNTECK CENTRAKO' FROM FO URTH TO EIGHTH FLOOR OF MMTC HOUSE AT C-22, BANDRA KURLA COMPLEX, BANDRA (E AST) MUMBAI. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143 (3) R.W.S. 143(2) OF THE 1961 ACT, IT WAS OBSERVED BY THE A.O. FROM THE DETA ILS OF REPAIRS AND MAINTENANCE EXPENSES THAT OUT OF TOTAL EXPENSES OF RS. 79,10,080/-, CERTAIN ITA 5293/MUM/2015 3 EXPENSES WHICH RELATED TO FURNITURE AND FIXTURE TO THE TUNE OF RS. 67,87,049/- WERE NOT INCURRED FOR REPAIRS AND MAINTENANCE. THE A.O. OBSERVED THAT THESE EXPENSES WERE INCURRED TO BRING INTO EXISTENCE AN A SSET , WHICH IS INTENDED TO PROVIDE ENDURING BENEFIT TO THE BUSINESS OF THE ASS ESSEE. THE AO OBSERVED THAT THE ASSESSEE CARRIED OUT CARPENTRY WORK INSIDE THE PREMISES WHICH HAS CREATED CABINS AND WORKSTATIONS. THE A.O. HELD THAT THESE EXPENSES COULD NOT BE TERMED AS REVENUE EXPENSES AND HENCE TREATED THE SAME AS CAPITAL EXPENSE. THE A.O. ACCORDINGLY DISALLOWED THE REPAI R AND MAINTENANCE EXPENSES TO THE TUNE OF RS,. 67,87,049/- AND WAS TR EATED AS AN ADDITION TO FIXED ASSETS IN THE BLOCK FOR FURNITURE AND FIXTURE , DEPRECIATION @10% ON FURNITURE AND FIXTURE WAS ALLOWED BY THE AO TO THE ASSESSEE , WHICH WORKED OUT TO RS. 6,78,705/- ON ASSETS CAPITALIZED, VIDE A SSESSMENT ORDER DATED 25- 02-2014 PASSED BY THE AO U/S 143(3) OF THE 1961 ACT . 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 25-02-20 14 PASSED BY THE A.O. U/S 143(3) OF THE 1961 ACT, THE ASSESSEE FILED AN A PPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) FOLLOWING EARLIER APPELLATE ORDER PA SSED BY LEARNED CIT(A) IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 AND 2009-10 WHEREIN LEARNED CIT(A) GRANTED RELIEF TO THE ASSESSEE , AND ALSO BY FOLLOWING ORDERS PASSED BY THE TRIBUNAL FOR ASSESSMENT YEARS 2009-10 WHEREIN TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE AND ALSO BY FOL LOWING THE ORDER OF THE HONBLE BOMBAY HIGH COURT IN ITA NO. 623 OF 2012 DA TED 11-03-2014 IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 WHE REIN HONBLE BOMBAY HIGH COURT DISMISSED THE APPEAL OF REVENUE, ALLOWE D THE APPEAL OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT BY HOLDING AS UNDER, VIDE APPELLATE ORDER DATED 26-08-2015:- 4.2 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE SUBMISSION OF THE AR. I HAVE ALSO GONE THROUGH THE ORDERS OF THE LCL.CIT (A), HON'BLE ITAT FOR A.Y. 2009-10 & 2007-0 8 AND ALSO THE ORDER OF HON'BLE HIGH COURT FOR A.Y. 2007-08 IN ITA NO.623 OF ITA 5293/MUM/2015 4 2012 DATED 11 TH MARCH,2014. SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THE HON'BLE ITAT AND HON'BLE H IGH COURT IN APPELLANT'S OWN CASE FOR VARIOUS ASSESSMENT YEARS A ND THE SAME WAS DECIDED IN FAVOUR OF THE APPELLANT. RESPECTFULL Y FOLLOWING THE ABOVE DECISIONS, THE EXPENDITURE CLAIMED BY THE ASS ESSEE IS TREATED AS 'REVENUE EXPENDITURE''. CONSEQUENTLY, TH E GROUND RAISED BY THE APPELLANT IS ALLOWED. 5. AGGRIEVED BY THE APPELLATE ORDER DATED 26-08-201 5 PASSED BY THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. D.R. RELIED ON THE ASSESSMENT ORDER OF T HE A.O. AND SUBMITTED THAT THE ADDITION MADE BY THE A.O. NEEDS TO BE SUST AINED. HOWEVER, THE LD. D.R. FAIRLY SUBMITTED THAT THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE IN ITA 623 OF 2012 VIDE ORDERS DATED 11 TH MARCH, 2014 FOR ASSESSMENT YEAR 2007-08 HAS DISMISSED THE APPEAL OF THE REVENU E AND CONFIRMED THE ORDER OF THE ITAT FOR ASSESSMENT YEAR 2007-08 DISMI SSING APPEAL OF THE REVENUE. THE LD. D.R. ALSO ADMITTED THAT THE MUMBA I-TRIBUNAL IN ITA NO. 616 TO 618/M/2014 FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2010-11 VIDE COMMON ORDER DATED 02.07.2015 IN ASSESSEES OWN CAS E HAS ALLOWED RELIEF TO THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BUSINESS CENTRE AND ALL OTHER ANCILLARY SERVICES. THE ASSESSEE HAD INCURRED CERTAIN EXPENSES TOWARDS REPAIRS AND MAINTENANCE WHICH HAS BEEN TREATED AS ADDITION TO FIXED ASSETS BY THE AO AND HELD TO BE CAPITAL EXPENDITURE BY THE AO UNDER THE BLOCK OF AS SETS FOR FURNITURE AND FIXTURE BEING INCURRED FOR CREATING NEW CABINS AND WORKSTATION , INSTEAD OF ALLOWING THE SAME AS REVENUE EXPENSES AS CLAIMED BY THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT THE TRIBUNAL AS WELL AS THE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE HAS ALLOWED APPEAL AND HELD THE SAID EXPENSES INCURRED FOR REPAIRS AND MAINTENANCE EXPENSES TO B E REVENUE EXPENSES. THE ITA 5293/MUM/2015 5 LD COUNSEL FOR THE ASSESSEE PLACED ON RECORDS ORDER S OF THE TRIBUNAL DATED 29.12.2011 IN ITA NO.6060/M/2010 FOR ASSESSMENT YEA R 2007-08 WHICH WAS LATER CONFIRMED/UPHELD BY HONBLE BOMBAY HIGH COURT IN ITA NO. 623 OF 2010 VIDE ORDERS DATED 11.03.2014 ( ORDERS PLACED IN FIL E). THE LEARNED COUNSEL FOR THE ASSESSEE ALSO PLACED ON RECORD BEFORE THE BENCH , MUMBAI-TRIBUNAL ORDER DATED 02.07.2015 FOR ASSESSMENT YEARS 2005-06, 2006 -07 AND 2010-11 IN ITA NO. 616 TO 618/MUM/2014, WHEREIN THE TRIBUNAL ALLOW ED THE CLAIM OF THE ASSESSEE BY DISMISSING THE APPEAL OF REVENUE( COMMO N ORDER DATED 02.07.2015 FOR ALL THE ABOVE ASSESSMENT YEARS PLAC ED IN FILE). 8. WE HAVE CONSIDERED RIVAL CONTENTIONS AND ALSO PE RUSED THE MATERIAL AVAILABLE ON RECORD . WE HAVE OBSERVED THAT THE AS SESSEE COMPANY IS ENGAGED IN THE BUSINESS OF BUSINESS CENTRE AND ALL OTHER AN CILLARY SERVICES. THE ASSESSEE COMPANY HAS ENTERED INTO A JOINT VENTURE A GREEMENT WITH MMTC LTD. ON 15-10-2009 WHICH IS VALID FOR 15 YEARS TO C ARRY ON BUSINESS OF RUNNING A BUSINESS CENTRE KNOWN AS 'SUNTECK CENTRAK O' FROM FOURTH TO EIGHTH FLOOR OF MMTC HOUSE AT C-22, BANDRA KURLA CO MPLEX, BANDRA (EAST) MUMBAI. THE ASSESSEE HAS CLAIMED CERTAIN EXPENSES W HICH WERE CLAIMED TO BE INCURRED ON REPAIRS AND MAINTENANCE AGGREGATING TO RS. 67,87,049/- AND THE A.O. TREATED THE SAME AS CAPITAL EXPENDITURE AN D ALLOWED DEPRECIATION AT THE RATE OF 10% WHICH WORKS OUT TO RS. 6,78,705/-. WE HAVE OBSERVED THAT IN ASSESSEES OWN CASE THE HONBLE BOMBAY HIGH COURT I N ITS ORDER IN ITA 623 OF 2012 DATED 11 TH MARCH, 2014 FOR ASSESSMENT YEAR 2007-08 HAS ALLOWE D RELIEF TO THE ASSESSEE BY HOLDING THE REPAIRS AND MAINTENA NCE EXPENSES INCURRED BY THE ASSESSEE TO BE REVENUE EXPENSE. THE ORDER OF T HE HONBLE BOMBAY HIGH COURT IN ASSESSEES OWN CASE IN ITA NO. 623 OF 2012 VIDE ORDERS DATED 11.03.2014 FOR ASSESSMENT YEAR 2007-08 , WHEREIN LO RDSHIPS HAS OBSERVED AS UNDER:- ITA 5293/MUM/2015 6 1. HEARD MR. SURESH KUMAR, LEARNED COUNSEL APPEARI NG FOR THE APPELLANT. . PERUSED THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL IMPUGNED IN THIS APPEAL. BY THE ORDER DELI VERED ON 29.12.2011, THE APPELLANTS APPEAL HAS BEEN DISMISS ED. THAT WAS THE DEPARTMENTS APPEAL AND WAS IN RELATION TO THE ASSESSMENT YEAR 2007-08. THE TRIBUNAL FOUND THAT THE COMMISSIO NER OF INCOME TAX (APPEALS) IN ORDER DATED 13.5.2010 HAS FOLLOWED THE COURSE ADOPTED IN RELATION TO THE PRECEDING OR PRIOR ASSES SMENT YEAR 2005- 2006 AND 2006-2007. IN THOSE TWO ASSESSMENT YEARS S IMILAR DIS- ALLOWANCES WERE MADE BY THE ASSESSING OFFICER AND W ERE DELETED BY THE SAID APPELLATE TRIBUNAL. HOWEVER, THE TRIBUN AL FINDING THAT THE APPROACH WAS ERRONEOUS AND COULD NOT BE UPHELD, ACCEPTED THE STAND OF THE ASSESSEE IN RELATION TO THESE ASSESSME NT YEARS. 2. IN PARAGRAPH 8 OF THE ORDER UNDER CHALLENGE THES E ARE THE VERY FACT WHICH ARE REFERRED TO BY THE TRIBUNAL IN DISMISSING THE DEPARTMENTS APPEAL. THE FINDINGS ARE ESSENTIALLY FACTUAL AND RENDERED IN THE BACKDROP OF THE MATERIAL PRODUCED. THEY ARE CONSISTENT THEREWITH. THE ASSESSEE WAS MAINTAINING THE PREMISES AS BUSINESS CENTRE. THE MAINTENANCE EXPENDITURE RE QUIRED FOR MAINTENANCE OF SUCH COMMERCIAL PREMISES HAS, THUS, BEEN UPHELD. THE QUANTUM OF RS. 60 LAKHS WAS HELD NOT TO BE UNRE ASONABLE, CONSIDERING THE NATURE OF THE BUSINESS AND THE TOTA L INVESTMENT OF RS. 5.25 CRORES. 3. IN THE LIGHT OF THE ABOVE, WE DO NOT SEE AS TO H OW SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION AND DETERM INATION IN THIS APPEAL. WE FIND THAT THE APPEAL CANNOT BE ENTERTAI NED BECAUSE THE ATTEMPT IS TO RE-APPRECIATE AND REAPPRAISE THE FACT UAL MATERIAL. THAT IS IMPERMISSIBLE WHEN THE FINDINGS ARE NOT VIT IATED BY ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD OR PERVERSITY. THE TRIBUNALS OBSERVATION IN ASSESSEES OWN CASE F OR ASSESSMENT YEARS 2005- 06, 2006-07 AND 2010-11 IN ITA NO. 616 TO 618/MUM/2 014 VIDE ORDERS DATED 02.07.2015 WHEREIN REVENUE APPEAL WAS DISMISSED , I S ALSO REPRODUCED HEREUNDER:- WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVO UR OF THE ASSESSEE BY THE FINDING OF THE TRIBUNAL IN THE OWN CASE OF THE ASSESSEE FOR A.Y. 2007-08. THE REVENUE IN ITS GROUN DS HAS TAKEN THE PLEA THAT THE REVENUE HAS NOT ACCEPTED THE ORDE R OF THE ITA 5293/MUM/2015 7 TRIBUNAL AND HAS PREFERRED AN APPEAL BEFORE THE HON 'BLE HIGH COURT. HOWEVER, THE LD. A.R. OF THE ASSESSEE HAS BR OUGHT OUR ATTENTION TO THE ORDER DATED 11.03.14 OF THE HON'BL E BOMBAY HIGH COURT PASSED IN THE OWN CASE OF THE ASSESSEE FOR A. Y. 2007-08 VIDE ITA NO.623 OF 2012 WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL FOR A.Y. 2007- 08. THUS, THE FINDING OF THE TRIBUNAL THAT THE EXPENDITURE INCURR ED BY THE ASSESSEE FOR MAINTAINING FURNITURE, FIXTURES ETC. F OR RUNNING THE BUSINESS CENTRE WERE REVENUE IN NATURE AND THUS ALL OWABLE HAS BEEN UPHELD BY THE HON'BLE BOMBAY HIGH COURT. THUS, THE ISSUE IS NOW SQUARELY COVERED BY THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE OWN CASE OF THE ASSESSEE. THUS, THE CL AIM OF THE EXPENDITURE BY THE ASSESSEE ON THIS ISSUE FOR A.Y. 2005-06, 2006- 07 & 2010-11 IS ACCORDINGLY ALLOWED. WE HAVE OBSERVED PECULIAR FINDINGS BY THE LEARNED A O IN HIS ASSESSMENT ORDER FOR THE IMPUGNED ASSESSMENT YEAR WHEREIN HE H AS CATEGORICALLY HELD THAT THESE EXPENSES OF RS. 67,87,049/- HAS BROUGHT INTO EXISTENCE AN ASSET , WHICH IS INTENDED TO PROVIDE ENDURING BENEFIT TO TH E BUSINESS OF THE ASSESSEE. THE AO HAS CATEGORICALLY HELD THAT THE ASSSESSEE HA S CARRIED OUT CARPENTRY WORK INSIDE THE PREMISES WHICH HAS CREATED CABINS A ND WORKSTATIONS. THIS FINDING OF THE AO HAS REMAINED UNCONTROVERTED. THIS IS PURELY FACTUAL MATTER WHICH REQUIRED INVESTIGATION OF FACTS , AND FACTS C OULD VARY FROM YEAR TO YEAR. WE HAVE ALSO OBSERVED THAT HONBLE BOMBAY HIGH COUR T IN ASSESSEES OWN CASE IN ITA NO. 623 OF 2012 VIDE ORDERS DATED 11.03 .2014 FOR ASSESSMENT YEAR 2007-08 HAS RECORDED CATEGORICAL FINDING AS UNDER I N ITS ORDER DATED 11.03.2013, AS UNDER: 2. IN PARAGRAPH 8 OF THE ORDER UNDER CHALLENGE THE SE ARE THE VERY FACT WHICH ARE REFERRED TO BY THE TRIBUNAL IN DISMISSING THE DEPARTMENTS APPEAL. THE FINDINGS ARE ESSENTIALLY FACTUAL AND RENDERED IN THE BACKDROP OF THE MATERIAL PRODUCED. THEY ARE CONSISTENT THEREWITH. THE ASSESSEE WAS MAINTAINING THE PREMISES AS BUSINESS CENTRE. THE MAINTENANCE EXPENDITURE REQUIRED FOR MAINTENANCE OF SUCH COMMERCIAL PREMISE S HAS, THUS, BEEN UPHELD. THE QUANTUM OF RS. 60 LAKHS WAS ITA 5293/MUM/2015 8 HELD NOT TO BE UNREASONABLE, CONSIDERING THE NATURE OF THE BUSINESS AND THE TOTAL INVESTMENT OF RS. 5.25 CRORE S. THERE WAS A FINDING OF FACT RECORDED BY TRIBUNAL IN ITS ORDERS DATED 29.12.2011 FOR ASSESSMENT YEAR 2007-08, THAT THE AS SESSEE HAS INCURRED EXPENSES FOR MAINTENANCE OF FURNITURE AND FIXTURE . THE ASSESSEE HAD ALSO CATEGORICALLY STATED IN ITS SUBMISSIONS FOR ASSESSM ENT YEAR 2007-08, THAT THE EXPENSES WERE INCURRED FOR MAKING THE EXISTING FUR NITURE AND FIXTURES OF THE BUILDING PREMISES SUITABLE TO THE CLIENTS BUSINESS . IT WAS ALSO CATEGORICALLY STATED BY THE ASSESSEE IN ITS SUBMISSIONS FOR SAID ASSESSMENT YEAR 2007-08 THAT IT DOES NOT MAKE ANY ADDITION TO THE FURNITURE AND FIXTURES OF THE BUILDINGS NOR ANY CONSTRUCTION OF NEW FURNITURE WAS UNDERTAKEN BUT THE EXPENSES WERE INCURRED FOR REPAIRING OR RENEWING TH E EXISTING FURNITURE AND FIXTURE. THE TRIBUNAL AS WELL HONBLE BOMBAY HIGH C OURT HAS FOR ASSESSMENT YEAR 2007-08 HELD THE SAID EXPENSES TO BE REVENUE E XPENSES KEEPING IN VIEW PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE , AS T HE MATTER BEING PURELY FACTUAL MATTER. BUT IN THE IMPUGNED ASSESSMENT YEAR UNDER APPEAL , THERE IS AN FINDING OF FACT THAT THE EXPENSES WERE INCURRED FOR CARPENTRY WORK INSIDE THE PREMISES WHICH HAS CREATED WORKSTATIONS AND CAB INS, WHICH HAS BROUGHT INTO EXISTENCE A NEW ASSET WHICH IS INTENDED TO PRO VIDE AN ENDURING BENEFIT TO THE BUSINESS OF THE ASSESSEE. WE ARE ALSO CONSCIOUS THAT HONBLE BOMBAY HIGH COUR T IN A RECENT DECISION DATED 29.06.2016 IN THE CASE OF RPG ENTERPRISES LIM ITED V. DCIT REPORTED IN (2016) 386 ITR 401(BOM.) , WHEREIN LORDSHIPS HELD T HAT WHERE EXPENDITURE HAS BEEN INCURRED BY TAXPAYER UNDER TENANCY AGREEME NT , WHICH WAS CLAIMED BY THE TENANT-TAXPAYER TO BE REPAIRS AND MAINTENANC E BUT, IN FACT, IT WAS ON ACCOUNT OF RENOVATION OF PREMISES, LEADING TO ENDUR ING BENEFIT TO TAX-PAYER IN AS MUCH AS IT ENABLED TAX-PAYER TO ACCOMMODATE LARG ER NUMBER OF EMPLOYEES AND ALSO FACILITATED ITS TRADING OPERATIONS AND THI S BENEFIT WOULD BE AVAILABLE ITA 5293/MUM/2015 9 TO TAX-PAYER FOR A LONG PERIOD OF TIME, IT WAS HELD BY LORDSHIPS TO BE CAPITAL IN NATURE. THUS, KEEPING IN VIEW FACTS AND CIRCUMSTANCES OF TH E CASE BEFORE US, WE ARE INCLINED TO SET ASIDE AND RESTORE THIS ISSUE BACK T O THE FILE OF THE AO FOR DE- NOVO DETERMINATION OF THE ISSUE ON MERITS IN ACCORD ANCE WITH LAW KEEPING IN VIEW RATIO OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF RPG ENTERPRISES LIMITED V. DCIT(SUPRA) AS IS APPLICABLE TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE KEEPING ALSO IN VIEW THAT THE ASSESSEE IS HOLDING THE PREMISES UNDER JV AGREEMENT WITH MMT C FOR A PERIOD OF 15 YEARS FOR RUNNING A BUSINESS CENTRE AND ALSO EARLIE R DECISIONS IN ASSESSEES OWN CASE SHALL ALSO BE DULY KEPT IN VIEW WHILE ADJU DICATING IN DE-NOVO PROCEEDINGS. THE ASSESSEE IS DIRECTED TO PRODUCE AL L RELEVANT EVIDENCES/ EXPLANATIONS BEFORE THE AO IN ITS DEFENSE, WHICH SH ALL BE ADMITTED BY THE AO IN THE INTEREST OF JUSTICE. NEEDLESS TO SAY THAT PR OPER AND ADEQUATE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED BY THE AO TO THE ASSESSEE IN ACCORDANCE WITH PRINCIPLES OF NATURAL JUSTICE IN AC CORDANCE WITH LAW. WE REITERATE THE ISSUE IS PURELY FACTUAL IN NATURE WHI CH REQUIRES INVESTIGATION OF FACTS AND FACTS COULD VARY FROM YEAR TO YEAR, THE A O BEING ADJUDICATOR AS WELL INVESTIGATOR IS, THUS, DIRECTED TO ELABORATELY INVE STIGATES FACTS AND THEN ARRIVE AT CONCLUSIONS IN ACCORDANCE WITH LAW WE ORDER ACC ORDINGLY. 9. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 5293/MUM/2015 FOR A.Y. 2011-12 IS ALLOWED FOR STATISTICAL PURPOSES. ITA 5293/MUM/2015 10 ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH AUGUST 2017. # $% &' 16.08.2017 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ MUMBAI ; & DATED 16.08.2017 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ / DR, ITAT, MUMBAI E BENCH 6. (BC D / GUARD FILE. / BY ORDER, = 9 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI