Expenditure on Hotel Rooms Renovation & Redecoration is Revenue Expense

Pandian Hotels Ltd. Vs DCIT (Madras High Court) The issue under consideration is whether the expenditure incurred in renovation and redecoration of rooms in a hotel is a revenue expenditure or capital expenditure? In the present case, the assessee contended before the Assessing Officer that the expenses were incurred for repairs and renovation of 18 rooms out of 57 rooms in the hotel and that there was no capital expenditure incurred by the assessee. It was further contended that there was no increase in the room capacity nor creation of any new asset, but the expenses were incurred only to pr...