Allow ability of building renovation expenses

Allow ability of  building renovation expenses

Case Study:

Decision by the Hyderabad Bench of the Tribunal in Dy CIT V. Chaya Lakshmi Creations P ltd. removes the dust over the question- “ Whether renovation expenditure on building taken on lease would be capital or revenue in nature?”- That any expenditure that does not alter the building structure would be characterized as a revenue expenditure.

Fact of Case : The assessee , running cinema business, having acquired five cinema theatres on lease, incurred expenditure towards renovations. The Assessing officer labeled such expenses as capital in nature and allowed depreciation thereon

Commissioner ( Appeals) : Disallowed expenditure in respect of marble flooring as capital in nature whereas he allowed rest of the expenses.

Tribunal : Allowed Expenses.

Full judgment : attached