DCIT CIR 6(1)(1), MUMBAI vs. ADITYA BIRLA MONEY INSURANCE ADVISORY SERVICES LTD, MUMBAI

Aforesaid appeals by the Revenue are against two separate orders, both dated 23rd November 2015, passed by the learned Commissioner (Appeals)–16, Mumbai, for the assessment years 2010– 11 and 2011–12.

There is a delay of one day in filing of the aforesaid appeals. After considering the submissions of the learned Departmental Representative we are satisfied that the delay in filing the appeals was for sufficient cause, hence, condoning the delay, we admit the appeals for adjudication on merit.

The solitary dispute which is common in both the appeals relates to allowance of assessee’s claim of expenditure for an amount of ` 62,43,378, in assessment year 2010–11 and ` 55,45,006 in assessment year 2011–12.

Brief facts which are more or less common in both the assessment years under appeal are that during the assessment proceedings the Assessing Officer noticing that the assessee has claimed expenditure towards repair and maintenance of building called upon the assessee to furnish the details of such expenditure and to 3 M/s. Aditya Birla Money Insurance Advisory Services Ltd. also explain why the expenditure claimed should not be capitalized and depreciation @ 10% thereon should not be allowed. In response, it was submitted by the assessee that the expenditure incurred are towards office cleaning and maintenance, salary of office boys, repair and maintenance of office equipments, etc. It was submitted, none of the expenditure incurred was of capital nature. The Assessing Officer, however, did not find merit in the submissions of the assessee. He was of the view that the expenditure incurred by the assessee towards improvement of the leasehold property is of capital nature, hence, cannot be allowed as deduction. Accordingly, rejecting the claim of the assessee, he allowed depreciation @ 10% on the expenditure claimed. Thus, similar disallowances were made in both the assessment years under appeal. Being aggrieved of disallowance of expenditure, assessee preferred appeals before the first appellate authority.

In the course of the proceedings before the learned Commissioner (Appeals) the assessee in support of expenditure claimed furnished additional evidences which were forwarded to the Assessing Officer for his examination and comment. The learned Commissioner (Appeals) after examining in detail the expenditure incurred by the assessee having found them to be of revenue nature allowed assessee’s claim.

The learned Authorised Representative strongly relying upon the observations of the first appellate authority and taking us through the documentary evidences filed in the paper book submitted that none of the expenditure incurred by the assessee is of capital nature. Thus, he submitted, the decision of the learned Commissioner (Appeals) should be sustained.

We have considered rival submissions and perused materials on record. As could be seen from the facts on record, before the Assessing Officer the assessee while justifying the claim of expenditure has submitted that they were towards cleaning and maintenance, salary of office boys, repairs and maintenance of office equipments, etc. Before the first appellate authority, some more evidences were filed by the assessee, such as, agreement with various agencies for providing services for office cleaning and maintenance, outsourcing, etc. These evidences were also forwarded to the Assessing Officer for his verification. As could be seen, from the factual finding of the learned Commissioner (Appeals) in Para–4.1.4 and 4.1.5 of the order passed for assessment year 2010–11, the expenditure incurred were towards office cleaning and maintenance, outsourcing of temporary

In the result, Revenue’s appeals are dismissed. Order pronounced in the open Court on 25.05.2018