High Court Of Rajasthan : Jaipur Bench
DCIT (Assessment) vs. Indo Continental Hotel & Resorts Ltd.
Section 4, 30
Mrs. Gyan Sudha Misra & Chatra Ram, JJ.
IT Appeal No. 11 of 1999
9th May, 2008
Counsel Appeared :
Anuroop Singhi, for the Appellant : Vaibhav Kasliwal, for the Respondent
JUDGMENT
By the court :
This IT Appeal No. 11 of 1999 has been preferred by the Dy. CIT against the order dt. 10th Nov., 1998, passed by the Tribunal by which a sum of Rs. 4,26,000, which was incurred by the respondent-assessee on the repairs and maintenance of the rooms of the hotel was treated as an expenditure as that amount had not resulted into the acquisition of a new asset. The question as to whether the expenditure incurred on the renovation and maintenance of a building can be treated as acquisition of asset so as to incur the liability of income-tax on the plea of acquisition of a new asset, has already been dealt with by a Co-ordinate Bench of this Court in IT Ref. Appln. No. 4 of 1999 decided on 12th Sept., 2000 and the Division Bench was pleased to hold that the expenses incurred on the renovation and maintenance ought not to be treated as income on the plea of acquisition of asset but has to be treated as expenditure and hence would not incur the liability of tax.
2. Learned counsel for the appellant could not controvert the fact that the income of Rs. 4,26,000 was spent on renovation of the rooms of the hotel and on that account if the said amount was not treated as an asset of the respondent, the view cannot be held to be contrary to the law or fact and hence in our view also, the Tribunal appears to be correct in concluding that the said amount ought to be treated as an expenditure and not as income. In view of the ratio of the Division Bench referred to hereinbefore, we see no ground to entertain this appeal. The appeal therefore is dismissed.
[Citation : 321 ITR 610]
