THE GADCHIROLI DIST. CENTRAL CO OP. BANK LTD.,GADCHIROLI vs. THE JT, CIT,CHANDRAPUR RANGE, CHANDRAPUR

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ITA 337/NAG/2016Status: DisposedITAT Nagpur15 November 2021AY 2011-124 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the expenditure was incurred solely for the maintenance of existing buildings and did not create any new asset. Therefore, it was considered revenue expenditure allowable under Section 37(1).

What were the facts?

The assessee, a District Co-operative Bank, incurred expenditure on building maintenance. The Assessing Officer treated this as capital expenditure, and the CIT(A) confirmed the addition. The assessee appealed this decision.

What were the issues?

Whether expenditure incurred on building maintenance is revenue or capital in nature.

Which sections of the Income-tax Act were involved?

Section 37(1)

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Income Tax Appellate Tribunal, BENCH, NAGPUR

Before: SHRI INTURI RAMA RAO, AM & SHRI S. S. VISWANETHRA RAVI, JM

Hearing: 10.11.2021Pronounced: 15.11.2021

ORDER

PER INTURI RAMA RAO, AM:

1.

This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-4, Nagpur (‘CIT(A)’ for short) dated 18.02.2016 for the assessment year 2011-12.

2.

The appellant raised the following grounds of appeal :- “1. On the facts and in circumstances of the case the Learned CIT (Appeals) erred in law on merit in confirming addition of Rs.30,23,894/- as capital expenditure where such expenditure was of revenue in nature and allowable u/s 37(1) of the Act.

2. The assessee craves for leave to add, amend, alter or delete any of the grounds of appeal with the permission of the Hon’ble Tribunal.”

3. Briefly, the facts of the case are as under : The appellant is a District Co-operative Bank engaged in the business of cooperative banking. The return of income for the 2011-12 was filed on 13.09.2011 declaring total income of Rs.12,75,53,570/-. Against the said return of income, the assessment was completed by the Joint Commissioner of Income Tax, Chandrapur Range, Chandrapur (‘the Assessing Officer’) vide order dated 20.02.2014 passed u/s 143(3) of the Income Tax Act, 1961 (‘the Act’) at a total income of Rs.26,86,79,081/- after making several disallowances. One of the disallowance we are concerned with is on account of expenditure incurred on maintenance of building of Rs.30,23,894/- holding it to be capital expenditure. Even on appeal before the ld. CIT(A), the same came to be confirmed by the ld. CIT(A).

4. Being aggrieved by the decision of the ld. CIT(A), the appellant is in appeal before us in the present appeal.

5. When the appeal was called on, none appeared on behalf of the assessee despite due service of notice. Therefore, we proceed to dispose of this matter by considering the material on record.

6. During the previous year relevant to the assessment year under consideration, the assessee bank incurred the following expenditure towards maintenance of building expenditure :- 1 Water Drainage Rs.6,17,049/- 2 Sanitary Lines Rs.1,90,195/- 3 Concrete Road Rs.14,21,114/- 4 Compound Wall Rs.5,13,160/- 5 Add: Service Tax Rs.2,82,373/- Total Rs.30,23,891/-

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