Expense on improvement of leased building not allowable U/s. 37(1) but depreciation can be claimed on the same

Assessee has incurred expenditure in modifying and improving the leased property and claimed it as revenue expenditure. CIT has applied Explanation “1A” of section 32, as per which, where the business of the assessee is carried on in the leased property and any expenditure is incurred on the construction of any structure by way of renovation, extension or improvement, then, section 32 will apply and accordingly, the assessee can claim depreciation on the value spent on such improvement or changes in the structure. The AR has relied on the decision of Hon’ble Madras High Court in the case...