NANDINI DELUX Vs. ASST. COMMISSIONER OF INCOME TAX
LAWS(IT)-2014-12-23
INCOME TAX APPELLATE TRIBUNAL
Decided on December 05,2014

Nandini Delux Appellant
VERSUS
ASST. COMMISSIONER OF INCOME TAX Respondents

JUDGEMENT

- (1.) THESE are a group of six appeals, three each filed by the assessee and Revenue, directed against the order of the Commissioner of Income Tax (Appeals) -VI, Bangalore dt. 15.1.2013 for Assessment Years 2008 -09 to 2010 -11. As all the above appeals emanate from the common order of the CIT (Appeals) - VI, Bangalore dt. 15.1.2013 and involve common issues, these appeals were heard together and we deem it appropriate to dispose them off by way of this common order.
(2.) THE facts of the case, briefly, are as under: - - "2.1 A search and seizure operation u/s. 132 of the Income Tax Act, 1961 (in short 'the Act') was conducted in the case of this assessee on 20.11.2009. In the course of search, a statement on oath u/s. 132(4) of the Act was recorded, inter alia, from the partner of the assessee firm, in which an amount of Rs. 1 Crore was admitted by the assessee as made towards undisclosed investments in the hotels run by it in the period relevant to Assessment Year 2008 -09. The assessee similarly admitted, on oath, to undisclosed investments of Rs. 1.50 Crores and Rs. 2 Crores in the periods relevant to Assessment Years 2009 -10 and 2010 -11 respectively. Pursuant to the notices issued u/s. 153A of the Act by the Assessing Officer, for Assessment Year 2008 -09 and 2009 -10, the assessee filed returns of income for, inter alia, the three impugned Assessment Years 2008 -09 to 2010 -11 including the additional income admitted in the statement u/s. 132(4) of the Act recorded in the course of search action, the details of which are as under: - - 2.2 The assessments for the impugned assessment years 2008 -09 to 2010 -11 were completed by orders dt. 28.12.2011. The Assessing Officer, inter alia, made additions towards gross profit from alleged unrecorded sales, over and above the additional income admitted and disclosed by the assessee, in all the three impugned assessment years 2008 -09 to 2010 -11 as under : Apart from the above additions, the Assessing Officer made another addition/disallowance of Rs. 28,37,185 in the order of assessment for A.Y. 2008 -09. In this regard, the assessee had incurred expenses of Rs. 29,86,511 towards flooring and wiring in the hotel premises which was claimed as a deduction treating them as revenue expenditure by the assessee. The Assessing Officer disallowed this claim, by holding these expenses to be capital in nature and allowed depreciation thereon (viz. Rs. 29,86,511 - Less Depreciation Rs. 1,49,326). 2.3 Aggrieved by the order of assessment for Assessment Years 2008 -09 to 2010 -11 dt. 28.12.2011, assessee preferred appeals before the CIT(Appeals) - VI, Bangalore. The learned CIT (Appeals) disposed off the assessee's appeals for the above three years by way of a common order dt. 15.1.2013 wherein, inter alia, the learned CIT (Appeals) deleted the additions related to the suppression of gross profits on alleged unrecorded sales, but confirmed the disallowance of expenditure incurred towards flooring and wiring of hotel premises by upholding the Assessing Officer's action in treating this expenditure as capital in nature."
(3.) AGGRIEVED by the order of the CIT(Appeals) - VI, Bangalore dt. 15.1.2013 for Assessment Years 2008 -09 to 2010 -11, both the assessee and revenue are in appeal before this Tribunal. Assessee's appeals inITA Nos. 446 to 448/Bang/2013 for A.Ys 2008 -09 to 2010 -11. The assessee's grounds of appeal for Assessment Year 2008 -09 are as under : "1. The order of the lower authorities is contrary to law facts and evidence available on record and is not maintainable. 2. The learned CIT (Appeals) has erred in upholding the decision of the learned A.O. to disallow expenses on interior decoration and renovation of rented building as capital expenditure and a low only depreciation under section 32(1) acting under section 153A of the Act without any seized material on this issue. 3. The learned CIT (Appeals) has erred in taking the view that the learned A.O. can review a decision already taken under section 153A or disturb an assessment which was a lowed to become final without any seized material pointing out to undisclosed income. 4. The learned CIT (Appeals) has erred in upholding the decision of the learned A.O. to disallow expenditure on interior decoration and renovation of rented building as capital expenditure and a lowing only depreciation under section 32(1) acting under section 153A of the Act without any seized material on this issue.;


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