No deferred revenue expenditure claim allowable unless specifically provided

Hansa Vision India P. Ltd. Vs DCIT (ITAT Chennai)

The assessee has claimed an amount of ₹.10,85,501/- towards expenses incurred on building and justified that the company during the financial year 2005-06 had incurred a sum of around ₹.97 lakhs towards temporary structure on the buildings held by the assessee company. The assessee company had, in fact, leased out the building after the renovation. The lease is for a period of 9 years from the assessment year 2006-07 to 2014-15. Before the Assessing Officer, the assessee has submitted that as per section 32 of the Act, the assessee is entitled to 100% depreciation of expenditure incurred towards temporary structures. The assessee company on a prudent basis had claimed the expenditure on the lease building not in one assessment year, but, over a period of lease. After considering the submissions of the assessee, the Assessing Officer has observed that the income received on building given on lease is taxable under the head “income from house property” and any expenses incurred thereto are not business expenditure. Further, the expense incurred on temporary partition is a revenue expense eligible for depreciation in the respective year if the asset is put to use for business. The amount has been incurred towards temporary structure during the previous year. No deferred revenue expenditure claim is allowable unless specifically provided under the Act. Hence, the Assessing Officer rejected the claim of depreciation on the expenditure of ₹.10,85,501/- and brought to tax. On appeal, the ld. CIT(A) confirmed the addition.

We have heard the rival contentions. Similar disallowance of expenditure of ₹.18,85,501/- was also made by the Assessing Officer in the assessment years 2012-13 and 2013-14 against which, on appeal, the ld. CIT(A) has held that the entire amount of expenditure on putting up partitions is not allowable under the scheme of the Act and confirmed the disallowance of ₹.10,85,501/- made by the Assessing Officer. By following the above decision of the ld. CIT(A) in earlier assessment years, the ld. CIT(A) has confirmed the disallowance under the assessment year under consideration. Before the Tribunal, the assessee has not brought on record as to whether the assessee has preferred any appeal against the above disallowance made in the assessment years 2012-13 and 2013-14. When once the assessee has accepted the disallowance in earlier assessment years, similar disallowance made on identical facts in subsequent assessment year cannot be challenged. Accordingly, the ground raised by the assessee is dismissed.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 6, Chennai, dated 29.11.2019 relevant to the assessment year 2014-15.

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