Capital Or Revenue Expenditure ::

Court :
HC

Brief :
Held by the Hon`ble Court that, explanation 1 of section 32(1) does not apply in a case of construction on the land which is taken on lease by the assessee, assessee did not acquire a capital asset but had put up a construction of the building only for business advantage. Therefore entire construction cost was admissible as revenue expenditure.

Citation :
C.I.T. Vs. TVS Lean Logistics Ltd.

Capital Or Revenue Expenditure C.I.T. Vs. TVS Lean Logistics Ltd. 07/27/2007 [2007]293 ITR 432 (Mad) Case Fact: Whether, construction of building on leasehold is capital expenditure? Decision: Held by the Hon`ble Court that, explanation 1 of section 32(1) does not apply in a case of construction on the land which is taken on lease by the assessee, assessee did not acquire a capital asset but had put up a construction of the building only for business advantage. Therefore entire construction cost was admissible as revenue expenditure.

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Judgement posted by

CA.Saibaburao Nanduri

Chartered Accountant

I am a commerce graduarte of Andhra University. Studied at HINDU COLLEGE, Guntur. Became FCA and started Practice under the name and style of M/s SAIBABU RAO CO I became Chairman of CA Institute, Guntur Branch, during the year 2008-09 My post qualifications are: Information Systems Audit DISA (ICAI) ... Read more

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