Stamp Duty to obtain Business Premises on Lease is Revenue Expense

Fiserv India Private Limited Vs ACIT (ITAT Delhi)

The issue under consideration is whether the stamp duty paid for obtaining the business premises on lease is deductible under section 37 of the Income Tax Act, 1961?

In the present case, the assessee paid stamp duty for the lease of business premises at sector 62, Noida which were taken on lease from Galaxy Mercantile Ltd. The stamp duty was paid in accordance with The Stamp Duty Act 1899, is a statutory levy for registering of the lease deed. During the assessment proceedings, the Assessing Officer noted that the stamp duty paid by the assessee for registering the lease deed, though for 10 years, is not revenue expenditure and therefore, the claim for the same was rejected.

ITAT states that, the period of lease for which the property has been taken cannot be regarded as a decisive test to determine the nature of the expenditure. It is not disputed that the stamp duty amount has been paid on lease deed for the carrying on of the business of the assessee and therefore the amount of stamp duty paid for has to be allowed as revenue expenditure. Further, it is also not a deferred revenue expenditure. In view of this, ITAT direct the lower authorities reversing the decision to allow the stamp duty charges paid by the assessee as an expenditure for the current year holding it  to be revenue expenditure in nature allowable u/s 37 (1) of the act. Accordingly, the appeal of the assessee is allowed.

FULL TEXT OF THE ITAT JUDGEMENT

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