Exp. Incurred Towards Interior Decoration Work of Rented Office Premises is Allowable As Revenue Expenditure | ITAT

Case Details: Harmuny Entertainment (P.) Ltd. v. DCIT - [2023] 157 taxmann.com 547 (Kolkata-Trib.)

Judiciary and Counsel Details

• • Dr Manish Borad, Accountant Member & Sonjoy Sarma, Judicial Member
  • Manish Tiwary, A/R for the Appellant.
  • G. Hukugha Sema, CIT for the Respondent.

Facts of the Case

The assessee had incurred certain amount towards interior decoration of office premises. It had claimed it as revenue expenditure. However, the Assessing Officer held that said expenditure incurred by the assessee was capital in nature.

The matter reached before the Tribunal.

ITAT Held

The Tribunal held that the assessee was in the entertainment business. Thus, the interior decoration of the office is very important, and with its help, the assessee can impress its clients and make better efforts to increase its business.

The assessee had also incurred office rent expenses. There was no immovable property in the form of an office under the head ‘fixed asset’. It prima facie indicates that the assessee incurred some interior decoration work in the rental premises, which was subject to change as and when needed.

Therefore, considering the total turnover of the assessee, the alleged sum being hardly 1 per cent of the gross turnover, and the assessee not having any self-owned office premises, it is to be held that it is a revenue expenditure, and the same should be allowed.

List of Cases Reviewed

• • KCP Ltd. v. CIT [2000] 112 Taxman 606/245 ITR 421 (SC) (para 10.1)
  • Super Poly Fabriks Ltd. v. CIT [2008] 217 CTR 107 (SC) (para 10.1)
  • TRF Ltd. v. CIT [2010] 190 Taxman 391/323 ITR 397 (SC) (para 11) followed.

List of Cases Referred to

• • Dy. CIT v. Shreyas S. Morakhia [2010] 40 SOT 432 (Bom.) (SB) (para 5)
  • TRF Ltd. v. CIT [2010] 190 Taxman 391/323 ITR 397 (SC) (para 5)
  • CIT v. Sugauli Sugar Works (P.) Ltd. [1999] 102 Taxman 713/236 ITR 518 (SC) (para 5.2)
  • Goodricke Group Ltd. v. CIT [2011] 11 taxmann.com 210/199 Taxman 402 (Mag.)/338 ITR 116 (Cal.) (para 5.2)
  • CIT v. Chougule & Co. (P.) Ltd. [1991] 54 Taxman 131/189 ITR 473 (Bom.) (para 5.2)
  • Ambica Mills Ltd. v. CIT [1964] 54 ITR 167 (Guj.) (para 5.2)
  • CIT v. Silver Cotton Mills Co. Ltd. [2002] 125 Taxman 741/254 ITR 728 (Guj.) (para 5.2)
  • Andaman Timber Industries v. CCE [2015] 62 taxmann.com 3/52 GST 355/314 ELT 641 (SC) (para 6)
  • CIT v. Eastern Commercial Enterprises [1994] 210 ITR 103 (Cal.) (para 6)
  • KCP Ltd. v. CIT [2000] 112 Taxman 606/245 ITR 421 (SC) (para 10.1)
  • Super Poly Fabriks Ltd. v. CIT [2008] 217 CTR 107 (SC) (para 10.1).