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Asstt. Commissioner of Income Tax (OSD) Circle2(3), Aayakar Bhavan 101, M.K. Road, Mumbai 400 020 Vs. Satguru Insfocorp Services Pvt. Ltd. Sunteck Centre, Subhash Road
May, 27th 2014
                 ,   `' 

                               "E" BENCH, MUMBAI

       ,      ,    


                      . / ITA no. 1557/Mum./2013
                    (  / Assessment Year : 2009­10)

Asstt. Commissioner of Income Tax (OSD)
                                                            .................  /
Circle­2(3), Aayakar Bhavan
101, M.K. Road, Mumbai 400 020                                              Appellant


Satguru Insfocorp Services Pvt. Ltd.
                                                            ...................  /
Sunteck Centre, Subhash Road
Vile Parle (E), Mumbai 400 057                                          Respondent
  ./ Permanent Account Number ­ AAECS6683A

                  / Revenue by             : Mr. Maurya Pratap
                  / Assessee by : Ms. Vinita Shah

     /                                                /
Date of Hearing ­ 22.05.2014                     Date of Order ­ 22.05.2014

                                       / ORDER

 ,     /

      The   present    appeal    has   been   preferred   by     the    Revenue
challenging the impugned order dated 11th December 2012, passed by
he learned Commissioner (Appeals)­VI, Mumbai, for the assessment
year 2009­10. The effective grounds raised by the Revenue are as
                                                                   Satguru Insfocorp
                                                                   Services Pvt. Ltd.


        "1. On the facts and in the circumstances of the case and in law
        the learned CIT(A) erred in holding that the amount of `
        38,81,321 under the head "repairs and maintenance expenses"
        and the amount of ` 59,75,995 under the head "furniture and
        fixture" are the revenue expenditure.

        2. On the facts and in the circumstances of the case and in law
        the learned CIT(A) failed to take into account the ratio laid down
        by Hon'ble Supreme Court in the case of Sarvana Spinning Mills
        as reported in 293 ITR 201."

2.      At the outset, the learned Counsel, Ms. Vinita Shah, on behalf of
the assessee, submitted that the learned Commissioner (Appeals) has
followed earlier year's appellate order for the assessment year 2005­06
to 2008­09 passed by learned Commissioner (Appeals) and also the
Tribunal order for the assessment year 2007­08. He further submitted
that the Tribunal has decided this issue in favour of the assessee in the
assessment year 2007­08 and 2008­09 also.

3.      The learned Departmental Representative also admitted that this
issue stands covered by the decision of the Tribunal in assessee's own

4.      After carefully considering the relevant finding of the learned
Commissioner (Appeals) and also the Tribunal order dated 29 th
December        2011,    passed     in    assessee's      own     case    in    ITA
no.6060/Mum./2010, for the assessment year 2007­08, a copy of
which has been placed on record, we find that the issue of disallowance
of claim for the repair and maintenance expenses has been the issue of
consistent dispute coming from the earlier years. The Revenue's case
has     been   that   the   expenditure    under    the    head    "repairs     and
maintenance" on building, fixtures and furniture is "capital" in nature,
whereas, the assessee's claim has been that it is revenue expenditure
                                                             Satguru Insfocorp
                                                             Services Pvt. Ltd.

incurred for the business centre run by the assessee which has been
taken on hire from MMTC Ltd., Mumbai. The Tribunal has decided this
issue in favour of the assessee for the assessment year 2007­08 in
assessee's own case after observing and holding as under:­

     "8. We are of the considered view that the learned CIT(A) has
     rightly stated that considering the total block of furniture and
     fixtures amounting to ` 5.25 crores, the repairs and maintenance
     expenditure of ` 60 lakhs could not be stated to be
     unreasonable, particularly when the furniture and fixtures were
     being used for business centre. The learned CIT(A) has stated
     that furniture and fixtures at business centre require inherent
     higher maintenance expenditure as business centre are used by
     a large number of people for commercial purposes resulting in
     higher wear­and­tear of the furniture etc. The learned CIT(A)
     has further stated that the assessee itself had capitalized a sum
     of ` 28 lakhs approximately on account of new furniture and
     fixture. The learned Departmental Representative has also not
     disputed the observation nof learned CIT(A) that in preceding
     years i.e., assessment years 2005­06 and 2006­07, similar
     disallowances were made by the Assessing Officer and were
     deleted by the first appellate authority. At the time of hearing,
     learned Departmental Representative could not state as to
     whether the department had accepted the said orders of learned
     CIT(A) or not.

     9. Considering he above facts and also considering the decision
     of Hon'ble Rajasthan High Court in the case of CIT v/s A.M.
     Sanghvi, 302 ITR 26, wherein it was held that even if the
     substantial amount is spent on repairs and renovation of office
     premises taken on rent, it is to be allowed as revenue
     expenditure because no capital asset is acquired by the
     assessee. Hence, we hold that there is no infirmity in the order
     of Ld. CIT(A). Therefore, we uphold his order by rejecting the
     grounds of appeal taken by the department."

5.   The aforesaid order of the Tribunal has also been followed in the
assessment year 2008­09. Since identical facts are permeating in this
year also, therefore, consistent with the view taken therein, we hold
that the expenditure claimed by the assessee is to be treated as
                                                           Satguru Insfocorp
                                                           Services Pvt. Ltd.

"revenue expenditure". Consequently, the grounds raised by the
Revenue are dismissed.


6.     In the result, Revenue's appeal is dismissed.

               22nd May 2014   
       Order pronounced in the open Court on 22nd May 2014

             Sd/-                                            Sd/-
        SANJAY ARORA                                     AMIT SHUKLA
     ACCOUNTANT MEMBER                                 JUDICIAL MEMBER


     / Copy of the order forwarded to:

(1)     / The Assessee;
(2)     / The Revenue;
(3)     () / The CIT(A);
(4)      / The CIT, Mumbai City concerned;
(5)     ,   ,  / The DR, ITAT, Mumbai;
(6)      / Guard file.
                                          / True Copy
                                            / By Order
 .  / Pradeep J. Chowdhury
   / Sr. Private Secretary
                                 /   / (Dy./Asstt. Registrar)
                                 ,   / ITAT, Mumbai
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