ASHOK KUMAR JAIN,NEW DELHI vs. ITO WARD 30(5), NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: SHRI SAKTIJIT DEY
This is an appeal by the assessee against the order dated
20.12.2022 passed by National Faceless Appeal Centre (NFAC), New
Delhi pertaining to assessment year 2018-19.
The dispute in the present is confined to the following two
disallowances:
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i) Expenditure on repair and maintenance of electrical equipment and installation : Rs.12,80,215; &
ii) Disallowance under Section 40(a)(i) of the Act on account of payment made to overseas entities towards advertisement expenses : Rs.3,62,220
At the time of hearing, learned counsel appearing for the
assessee, on instructions, did not contest the disallowance of
Rs.3,62,220 made under Section 40(a)(i) of the Act. Accordingly,
assessee’s ground on the issue is treated as not pressed, hence,
dismissed.
As regards, disallowance of Rs.12,80,215, briefly, the facts are,
in course of assessment proceedings the Assessing Officer, while
verifying the financial statement noticed that the assessee has debited
an amount of Rs.12,80,215 towards expenses on electrical
instruments.
After verifying the details, he found that the major part of the
expenditure was towards purchase and installation of LED lights in his
hotel “Airport Motel”.
Being of the view that by incurring the expenditure, the assessee
has acquired capital assets with enduring benefits, the Assessing
3 ITA No.396/Del./2023
Officer treated it as capital expenditure and disallowed the same.
Though, the assessee contested disallowance before learned
Commissioner (Appeals), however, he was unsuccessful.
I have considered rival submissions and perused the material
available on record.
As could be seen from the facts on record, out of the total
expenditure of Rs.12,80,215 claimed by the assessee, an amount of
Rs.8,15,000 was for installation of LED lights and rest of the amount
was for other routine expenses.
From the facts and material placed before me, it is observed that
the assessee has replaced old bulbs/tube lights with new LED lights.
Some other expenditure was incurred for regular repair and
replacement. Thus, from the nature of expenditure incurred, it is
evident that they are in the nature of consumables and not for
acquiring any assets of enduring nature. I am of the view, replacement
of old tube light with LED lights cannot be treated as capital
expenditure. Therefore, I do not find any reason to sustain the
disallowance made by the Assessing Officer. Accordingly, I delete the
disallowance of Rs.12,80,215. The ground is partly allowed.
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In the result, the appeal is partly allowed. Order pronounced in the open court on 31st March, 2023. Sd/- (SAKTIJIT DEY) JUDICIAL MEMBER Dated: 31st March, 2023. Mohan Lal
