Renovation expenses incurred on leased premises and allowability of same as revenue

RELEVANT PARAGRAPH 12. Broadly, if an expenditure gives the assessee an enduring advantage, the same has to be treated as a capital expenditure. Similarly if an expenditure is incurred on a leased premises and the agreement speaks of handing over possession of the property to the original owner as-it-is, without any benefit or without any right to retain the improvements made to the existing premises, such expenditure may be treated as revenue in nature since the assessee cannot be said to be having any enduring advantage out of such expenditure. Courts have also highlighted subtle difference ...