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ALLOWABILTY OF EXPENSES

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Querist : Anonymous

Querist : Anonymous (Querist)

01 August 2010 I am a tenant in a premises and I incurred certain expenses for renovation of the premises . In the Income Tax Return I claimed deduction for the said expenses incurred as revenue expenditure. Is such deduction permissible ?

CA Sanat Pyne

CA Sanat Pyne (Expert)

01 August 2010 Yes, you will be entitled to the benefits of Section 37 of the Income tax Act, 1961 in case you have incurred expenses on the renovation of the tenanted premises. The tenant does not acquire any capital assets in doing the same because of the building does not belong to him and as such the expenditure can not be termed of a revenue nature. The expenditure has been incurred for the purposes of facilitating the assesses business operation or otherwise and the said amount should be allowable as Revenue Expenditure under Section 37 of the Income-tax Act.

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