A Division Bench of the Mumbai Income Tax Appellate Tribunal (ITAT) in M/s. Maharashtra Film Stage Cultural Development Corporation Ltd. Versus Jt. CIT held that expenditure incurred to repair or renovate existing make-up rooms are revenue in nature.
The sole issue related with the disallowance of certain amount where assessee claimed the same as revenue expenses with respect to the renovation of 76makeup rooms. Assessing officer also added that these expenses are capital in nature which consists of heavy repairs which are of not recurring in nature.
Upon appeal before CIT(A) by Assessee, the authority confirmed the action of AO by observing that certain activities held at the make-up rooms shows that these expenses have been incurred for up-gradation by renovating the existing rooms which have an enduring benefit.
Further aggrieved, the assessee carried the matter to the ITAT.
The bench including Shamim Yahya, accountant member, and Ramlal Negi Judicial Member disposed the case in favor of Assessee and pointed that no new asset has come into existence instead assessee renovated and repaired the make-up rooms by doing urinal pans, removal of plaster, replacement of doors and windows, waterproofing treatment etc.
Accordingly, the bench pressed the High Court decision laid in the case CIT vs. Oxford University Press and opinioned that certain expenditure incurred by assessee through renovating and repairing existing make-up rooms are duly qualified for revenue expenditure.
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