Asian Hotels Limited, New Delhi v. DCIT, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER ITA NO.2589/DEL/2010 ASSESSMENT YEAR : 2007-08 ASIAN HOTELS LTD. BHIKAJI CAMA PLACE NEW DELHI. PAN : AAACA0125H VS. DCIT CIRCLE 2 (1) NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M.P. RUSTOGI ADVOCATE & SHRI P.N. SHASTRI CA REVENUE BY : MRS. ANUSHA KHURANA SR. DR ORDER PER I.P. BANSAL JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED A GAINST THE ORDER PASSED BY THE CIT (A) DATED 15 TH MARCH 2010 FOR ASSESSMENT YEAR 2007-08. GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ` 26 37 540/- COMPRISING OF VARIOUS EXPENSES OF BUSINESS AS BEING CAPITAL NATURE. 2. THAT CONSEQUENTIAL RELIEF IN INTEREST U/S 234A 23 4B AND 234C MAY PLEASE BE GRANTED. 3. THAT THE APPELLANT MAY BE ALLOWED TO ADD ALTER DELETE SUBSEQUENT ANY OF THE GROUNDS RAISED HEREIN ABOVE. 2. THE ASSESSEE IN THE PRESENT CASE IS ENGAGED IN THE HOTE L OPERATION AND IS OWNER OF THREE HOTELS LOCATED AT DEL HI MUMBAI AND ITA NO.2589/DEL/2010 2 KOLKATTA KNOWN AS HYATT REGENCY DELHI HYATT REGEN CY MUMBAI AND HYATT REGENCY KOLKATTA. IT FILED ITS RETURN OF INC OME DECLARING AN INCOME OF ` 132 68 00 140/- AND IT HAS BEEN ASSESSED AT AN INCOME OF ` 135 72 32 123/-. A DISALLOWANCE OF A SUM OF ` 68 6 4 747/- WAS MADE ON ACCOUNT OF CAPITAL EXPENDITURE OF ` 75 94 163/- DEBITED TO PROFIT & LOSS ACCOUNT BY ALLOWING DEPRECIATION @ 10% FOR A SUM OF `7 59 416/-. THE AMOUNT OF ` 75 94 163/- TREATED AS CAPITAL EXPEN DITURE COMPRISE OF FOLLOWING THREE COMPONENTS:- I) ` 7 97 366/- COMPRISES OF VARIOUS ITEMS THE DETAILS O F WHICH ARE GIVEN ELSEWHERE IN THE ORDER. II) ` 15 77 349/- CIVIL AND INTERIOR WORKS IN GUEST R OOMS. III) ` 52 19 448/- CIVIL INTERIOR WORKS INCLUDING DI SMANTLING A-WING. THE DETAILS OF ` 7 97 366/- IS AS UNDER:- 1. METAL HALIDE LAMP 35 719 2. MAINTENANCE KIT & HEATER 64 519 3. BANQUET KITCHEN BLOWER 30 707 4. INDUSTRIAL ELECTRICAL HEATER 14 625 5. MULTIFLOW HEAD SHOWER 59 700 6. DOOR FRAME METAL DETECTOR 45 801 7. SUPPLY & INSTALLATION OF BLINDS 1 21 865 8. ROLLER BLINDS 1 57 950 9. DINING CHAIRS 38 750 10. DOUBLE BED 11 500 11. DVD WRITER 22 800 12. WASHING MACHINE LG 7061 11 990 13. SHELL AND TUBE TYPE WATER 1 81 500 7 97 366 ====== ITA NO.2589/DEL/2010 3 3. THE ADDITION WAS AGITATED BEFORE THE CIT (A). OU T OF ` 7 97 366/- IN RESPECT OF 13 ITEMS STATED IN ABOVE MENTIONED LIST LEARNED CIT (A) HAS UPHELD THE ADDITION WITH RESPECT TO ITEMS AT SL. NO .3 6 AND 10-13 AGGREGATING TO A SUM OF ` 3 04 298/-. HE HAS DISCUSSED EACH ITEM AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS DELETED THE OTHER ADDITIONS ON ACCOUNT OF THOSE BEING REVENUE EXP ENDITURE. HE HAS ALSO DELETED THE AMOUNT OF ` 15 77 349/- WHICH C ONSTITUTED ITEMS LIKE REPAIR OF SINGLE SHAFT REPAIR OF CORNICE AREA REPAIR OF SKIRTING MANPOWER FOR CLEANING CARTAGE AND DISPOSABLE DEBRIS ETC. WHICH HAS ALSO BEEN CONSIDERED TO BE REVENUE IN NATURE BY THE L EARNED CIT (A). 4. OUT OF REMAINING AMOUNT OF ` 52 19 448/- LEARNE D CIT (A) HAS UPHELD TWO ADDITIONS OF ` 14 84 790/- AND ` 8 48 452 /- BEING AMOUNTS SPENT ON COVERING THE EXISTING WOODEN FLOORS WITH 8 MM PLY AND ON ACCOUNT OF E-BOARD PARTITION WITH BTW PLY WITH VESTI BULE AREA WOODEN FRAME WITH BOTH SIDE BOARD AND HAS DELETED THE OTHE R ADDITIONS. NOW THE ASSESSEE IS AGGRIEVED WITH THE RETAINED ADDITION OF ` 3 04 298/- OUT OF 13 ITEMS DISALLOWED OUT OF ` 7 97 366/- AND ` 23 3 3 242/- (` 14 84 790/- + ` 8 48 452/-). 5. LEARNED AR HAS SUBMITTED BEFORE US THE CHART IN WHI CH IT HAS BEEN SHOWN THAT HOW THE DISALLOWANCES HAVE BEEN MADE B Y THE ASSESSING OFFICER AND SUSTAINED BY THE CIT (A). THE SAID CHART IS REPRODUCED BELOW:- DETAILS OF REPAIRS & MAINTENANCE DISALLOWED AS CAP ITAL IN NATURE. SL. NO. PARTYS NAME PARTICULARS BILL AMT. DISALLOWE D BY A.O. ALLOWE D BY CIT (A) DISALLOWE D BY CIT (A) PAPER BOOK NO. 1. KNOWN SALES & SERVICES BANQUET KITCHEN BLOWER 30 707 30 707 45 801 1 2. SHIVANAND A ELECTRONICS DOOR FRAME METAL DETECTOR 45 801 45 801 45 801 2 ITA NO.2589/DEL/2010 4 3. ASHOKA & BROS PROVIDING AND MAKING OF DOUBLE BED 11 500 11 500 11 500 3 4. COMPAQ INDIA SONY DVD WRITER BACK 22 800 22 800 22 800 4 5. FAIRDEAL INTERNATI WASHING MACHINE 11 990 11 990 11 990 5 6. ENGINEERS SYNDICATE WATER TO WATER HEAT EXCHANGER 1 81 500 1 81 500 1 81 500 6 7. AGRIM ASSOC. PVT. LTD. GUEST ROOMS 21616520 LESS: CAPITALISED 1 63 97 072 52 19 448 52 19 448 28 86 206 23 33 242 -------------------------------------------- ---------------------------------------- TOTAL 55 23 74 6 28 86 206 26 37 540 ====== ================ 6. HE HAS ALSO FILED BEFORE US THE COPY OF INVOICES AC CORDING TO WHICH SUCH EXPENDITURE WAS INCURRED BY THE ASSESSEE. HE HAS ALSO SUBMITTED BEFORE US A SMALL NOTE ON THIS EXPENDITURE WH ICH READ AS UNDER:- ASIAN HOTELS LTD AY 2007 ASIAN HOTELS LTD AY 2007 ASIAN HOTELS LTD AY 2007 ASIAN HOTELS LTD AY 2007- -- -08 0808 08 PURPOSE OF USE OF PLY FOAM PURPOSE OF USE OF PLY FOAM PURPOSE OF USE OF PLY FOAM PURPOSE OF USE OF PLY FOAM THE HOTEL UNDERTOOK CHANGES IN ELECTRICAL CONDUITS AND CABLING AS WELL AS THE CONSEQUENT POP WORK ETC IN THE HOTEL. T HESE WERE CAPITALIZED IN BOOKS. THE ELECTRICAL CONDUITS AND CABLING ARE IN MODERN 5 S TAR HOTELS ARE LAID IN A CONCEALED MANNER IN THE WALLS. THIS IN VOLVES CUTTING THE WALLS AND ROOFS FOR LAYING THE ELECTRICAL CONDUITS AND CABLES AND THEN PLASTERING. IN ORDER TO GIVE THE REQUIRED AMBIENCE OF A 5 STAR HOTE L THE WALLS AND ROOFS ARE COATED WITH POP WORK WHICH INVOLVES PL ASTERING OF WALLS AND ROOF WITH PLASTER OF PARIS. THE HOTEL HAS POLISHED WOODEN FLOORS OR POLISHED MAR BLE OR GRANITE FLOORS. IT IS BUT NATURAL THAT WHEN SUCH WORK IS DONE THEN THE DEBRIS AND THE WET PLASTER OF PARIS WILL FALL ON THE FLOOR. ITA NO.2589/DEL/2010 5 IF THEY DEBRIS ETC IS SCRATCHED FOR REMOVAL FROM THE F LOOR IT WILL RESULT DAMAGE TO THE POLISH AS WELL AS THE BASIC FLOOR. IN ORDER TO RESTORE IT TO ITS ORIGINAL STATE IT WILL INVOLVE REPLACIN G THE DAMAGED FLOOR PORTIONS BESIDES REFINISHING AND POLIS HING THEM. IT IS TO BE BORNE IN MIND THAT IN A 5 STAR HOTEL THE UNIF ORMITY OF THE FLOOR COLOR ETC HAS TO BE MAINTAINED AT A MUCH HIGHE R LEVEL. THIS WILL RESULT IN A HIGHER EXPENSE ON RESTORING THE FLOOR TO ITS ORIGINAL STATE. IT WILL ALSO INVOLVE A LARGER NUMBER O F DAYS FOR WHICH THE ROOMS HAVE TO BE KEPT AWAY FROM BEING ALLOTTED TO GUESTS AND EARNING REVENUE IN ORDER TO ECONOMIZE ON IT AND BRING BACK THE ROOMS TO EARNING STATUS AT AN EARLY DATE A LAYER THIN OF FOAM SHEETS [REF ERRED TO AS PLY FOAM IN ENGINEERING /COMMERCIAL PARLANCE A RE SPREAD /LAID ON THE FLOOR AND THEN A IMPERVIOUS PLASTIC ADHES IVE SHEET IS USED TO STICK IT ON THE FLOOR. THESE ARE REMOVED AFTER THE WORK IS OVER AND DISPOSED OFF ALONG WITH THE DEBRIS ETC ON THEM. THUS IT WILL BE OBSERVED THAT THIS EXPENDITURE HAS NOT RE SULTED IN ANY ENDURING BENEFIT TO THE APPELLANT RESULTING IN A CAP ITAL ASSET BUT IT IS ONLY FOR THE PURPOSES OF PROTECTING AN EXISTING ASSET IN USE. IT IS ALSO FOR THE PURPOSES OF BRINGING BACK THE ROOMS TO THEIR EARNING STATUS AT AN EARLY DATE. THUS IT IS A REVENUE EXPENDITURE ALLOWABLE AS REPAIR S AND BUSINESS EXPENDITURE ON GROUNDS OF COMMERCIAL EXPEDI ENCY ALLOWABLE U/S 28 AND 37 OF THE INCOME TAX ACT 1961 IT IS PRAYED ACCORDINGLY PURPOSE OF USE OF E PURPOSE OF USE OF E PURPOSE OF USE OF E PURPOSE OF USE OF E- -- -BOARD PARTITIONS BOARD PARTITIONS BOARD PARTITIONS BOARD PARTITIONS WHEN CONSTRUCTION OR LARGE SCALE REPAIRS ARE CARRIED OUT THEN THE AREA IS REQUIRED TO BE CORDONED OFF SO THAT PERSONS OTHER THAN THE PERSONS RELATED TO THE WORK DO NOT ENTER THE AREA AND INJURE THEMSELVES. IT IS COMMON KNOWLEDGE THAT IF ANY PERSON GETS INJURED AT SUCH A WORK SITE /AREA THEN THE OWNER AND THE CONTRACTOR ARE VICARIOUSLY LIABLE AND HAVE TO PAY COMPENSATION FOR TH E INJURIES AND LOSS OF TIME ETC IT IS FOR THIS PURPOSE THAT THE WORK SITES ARE CORDONED OFF WITH STEEL /WOODEN BARRICADES AND WARNING BOARDS AND LIGH TS ARE PUT EVEN IN PUBLIC PLACES LIKE IN ROAD WORK OR METRO CON STRUCTION SITES ITA NO.2589/DEL/2010 6 THE COMPANY HAD ACCORDINGLY ERECTED BARRICADES WITH W OODEN PARTITIONS MADE OF E-BOARDS [PLY BOARDS MADE WITH WOOD EN PARTICLES- WHICH ARE CHEAPER THAN REGULAR WOODEN BOAR DS AND STEEL] TO CORDON OFF THE WORK AREA. THEY WERE ALSO PAI NTED TO GIVE NEAT LOOK AND NOT PUT OFF THE GUESTS THESE PARTITIONS WERE REMOVED AND DISCARDED AFTER COMP LETION OF THE WORK. THUS IT WILL BE OBSERVED THAT THIS EXPENDITURE HAS NOT RE SULTED IN ANY ENDURING BENEFIT TO THE APPELLANT RESULTING IN A CAP ITAL ASSET BUT IT IS ONLY FOR THE PURPOSES OF PROTECTING ITSELF AGAI NST LEGAL CLAIMS FROM GUESTS AND PUBLIC WHO MAY OTHERWISE GET IN JURED BY STRAYING INTO THE WORK SITE BY TAKING THE PRECAUTIONS ENL ISTED BY COURTS. IT IS NEEDS NO ELABORATION THAT THESE WOODEN PARTITIONS WE RE TEMPORARY IN NATURE. THEREFORE IT IS SUBMITTED WITHOUT PREJUDICE TO THE FOREGOI NG THAT EVEN IF IT IS DEEMED AS AN ASSET IT BEING A TEMPORARY WOODEN STRUCTURE / CONSTRUCTION IT IS ELIGIBLE TO BE DEPRECIATED AT 100% OR WRITTEN OFF IT IS PRAYED ACCORDINGLY WATER TO WATER HEAT EXCHANGER WATER TO WATER HEAT EXCHANGER WATER TO WATER HEAT EXCHANGER WATER TO WATER HEAT EXCHANGER RS.1 81 500 RS.1 81 500 RS.1 81 500 RS.1 81 500 - ENERGY CONSERVATION AND WATER SAVING ARE PRIORITIES TO DAY AND WE FOLLOW THIS AT THE HOTEL. TO SAVE WATER AND RE-US E IT THE HOTEL HAS A SYSTEM WHERE THE CONDENSATE WATER FROM THE LAUNDRY AND THE KITCHEN IS REUTILIZED IN ITS BOILERS. T HE SYSTEM REQUIRES THAT THE CONDENSATE WATER WHICH IS REUTILIZED FR OM THE LAUNDRY AND THE KITCHEN SHOULD BE AT A TEMPERATURE OF NO T MORE THAN 70 TO 75 DEGREES C. THE WATER WHICH COMES OUT OF B OTH THE ABOVE DEPARTMENTS IS AT A TEMPERATURE BETWEEN 85 - 95 DEGREES C. THE WATER TO WATER HEAT EXCHANGER LOWERS THE TEMPERATURE OF THIS WATER TO 70 DEGREES C AND PUMPS IT IN TO THE BOILER. SINCE THE HEAT EXCHANGER AND THE PUMP OPERATES AT SUCH HIGH TEMPERATURES THE WEAR AND TEAR IS QUITE HEAVY AND R EQUIRES REGULAR MAINTENANCE AND REPLACEMENT OF PARTS/COMPONENTS . THIS AMOUNT OF RS. 1 81 500/- WAS EXPENDED ON THIS MAINTENANCE AND REPLACEMENT. YOUR GOODSELF IS REQUESTE D TO DELETE THE ADDITION OF RS. 1 81 500/- ON ACCOUNT OF CAP ITAL. 7. REFERRING TO ALL THESE DETAILS IT WAS SUBMITTED BY HIM THAT THE ASSESSEE IS RUNNING A FIVE-STAR HOTEL AND IT HAS TO KEEP A ND MAINTAIN THE STANDARD OF HOTEL THUS THE EXPENDITURE ARE NORM AL ROUTINE ITA NO.2589/DEL/2010 7 EXPENDITURE. THEY DID NOT GIVE ANY ENDURING BENEFI T TO THE ASSESSEE AND HENCE IT WAS PLEADED BY HIM THAT KEEPING IN VI EW THE SUBMISSIONS MADE BY HIM THESE DISALLOWANCES SHOULD BE DELE TED. 8. ON THE OTHER HAND RELYING UPON THE ORDER OF CIT (A) IT WAS PLEADED BY LEARNED AR THAT AFTER CONSIDERING EACH IT EM LEARNED CIT (A) HAS SUSTAINED THE DISALLOWANCE AND HAS GIVEN SUBSTANTI AL RELIEF TO THE ASSESSEE. HIS ORDER BEING REASONABLE SHOULD BE UPHELD . 9. IT MAY BE MENTIONED HERE THAT VIDE ORDER SHEET EN TRY DATED 5 TH AUGUST 2010 LEARNED DR WAS GIVEN AN ADJOURNMENT TO CHECK WITH THE DEPARTMENT WHETHER THE DEPARTMENT HAS ALSO FILED ANY APPEAL AGAINST THE IMPUGNED ORDER OF CIT (A) AND AT THE TIME OF H EARING IT WAS SUBMITTED BY LEARNED DR THAT ACCORDING TO INFORMATIO N RECEIVED BY HER NO APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAINST TH E IMPUGNED ORDER OF THE CIT (A). IN THIS MANNER THIS APPEAL WA S PROCEEDED FOR HEARING. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE FIRST ITEM DISALLO WED BY LEARNED CIT (A) IS BANQUET KITCHEN BLOWER WHICH IS A SUM OF `30 70 7/-. IT HAS BEEN THE SUBMISSION OF THE ASSESSEE THAT IT REPRESENTED THE COST OF REPLACING A BLOWER WHICH IS A PART OF THE ENTIRE EXH AUST SYSTEM OF A BANQUET KITCHEN. ACCORDING TO THE LEARNED CIT (A) SUCH A BLOWER IS A COMPOSITE PIECE OF MACHINERY AND IS CAPITAL IN NATURE . WE FIND NO SUBSTANCE IN THE FINDINGS RECORDED BY THE CIT (A). IF IT IS A CASE OF REPLACEMENT OF A BLOWER ONLY THEN IT CANNOT BE SAI D THAT IT WAS AN EXPENDITURE OF CAPITAL NATURE AS THE PROPER WORKING OF THE EXHAUST SYSTEM NECESSITATED REPLACEMENT OF THE BLOWER. REPLACE MENT OF A DAMAGED EQUIPMENT RELATING TO A SYSTEM CANNOT BE HELD TO BE AN EXPENDITURE WHICH HAS GIVEN ANY ENDURING BENEFIT TO THE ASSESSEE. ITA NO.2589/DEL/2010 8 11. THE SECOND ITEM RELATES TO DOOR FRAME METAL DETEC TOR. THIS HAS BEEN CONSIDERED TO BE A CAPITAL ITEM. HOWEVER IT R ELATES TO SECURITY CHECKING OF A PERSON ENTERING INTO THE HOTEL. THIS I S REQUIRED FOR SECURITY REQUIREMENTS. THOUGH IT MAY BE CAPITAL ITEM BUT IT IS A MINIMUM REQUIREMENT OF A FIVE-STAR HOTEL. WE HAVE G ONE THROUGH THE INVOICE OF THIS METAL DETECTOR A COPY OF WHICH IS PL ACED AT PAGE 2 OF THE PAPER BOOK AND FIND THAT THIS ITEM CANNOT BE TR EATED AS CAPITAL EXPENDITURE AS IT IS A NECESSITY ITEM FOR A FIVE-STAR HO TEL TO ENSURE THE SECURITY THEREFORE THE SAME IS DELETED. 12. THE NEXT ITEM RELATES TO A SUM OF ` 11 500/- WHIC H IS A DOUBLE BED. IT HAS BEEN THE CASE OF THE ASSESSEE BEFORE LEARNED CIT (A) THAT FURNITURE WAS INITIALLY CAPITALIZED IN 2004 WHEN ASSESSE ES HOTEL COMMENCED OPERATION AND TAKING INTO ACCOUNT SUCH SUBM ISSIONS LEARNED CIT (A) HAS TREATED THE EXPENDITURE ON THE SA ID ITEM I.E. DOUBLE BED AS CAPITAL EXPENDITURE. THE COPY OF INVO ICE IS PLACED AT PAGE 3 OF THE PAPER BOOK. IT IS WRITTEN IN THE INVO ICE PROVIDING AND MAKING WOODEN DOUBLE BED WITH MELAMINE POLISH IN GUE ST ROOM # 333. IT APPEARS TO BE A REPLACEMENT OF EXISTING BED IN THE HOTEL. IN A FIVE-STAR HOTEL SUCH REPLACEMENT CANNOT BE CALLED A C APITAL EXPENDITURE WHEN IT HAS BEEN CHANGED ONLY IN ONE ROOM. THIS DISAL LOWANCE IS ALSO DELETED. 13. THE NEXT ITEM OF DISALLOWANCE IS A SUM OF ` 22 800 /- WHICH RELATES TO DVD WRITER FOR ` 2900 AND AN EXTERNAL HAR D DISC WITH A MEMORY OF 400 GB FOR ` 14 900/- AND AN ADDITIONAL H ARD DISC WITH A MEMORY OF 40 GB OF ` 5000/-. AS PER THE SUBMISSION OF THE ASSESSEE THESE ARE PURCHASED FOR DIFFERENT COMPUTER SYSTEMS AND A LL THESE ITEMS ARE DULY SUPPORTED BY INVOICES. ACCORDING TO LE ARNED CIT (A) EXTERNAL HARD DISC AND DVD WRITERS THOUGH ACCESSORIES AR E DISTINCT AND ITA NO.2589/DEL/2010 9 SEPARATE FROM ANY COMPUTER SYSTEM AND ARE BOUGHT AND U SED FOR ENHANCING A COMPUTER SYSTEM AND HENCE HAS RESULTED IN E NDURING BENEFITS TO THE ASSESSEE. IF THESE ITEMS ARE PURCHASED FOR IMMEDIATE NEED THEN IT CANNOT BE SAID THAT THESE ARE CAPITAL EXPENDITURES. WE FIND NO JUSTIFICATION IN UPHOLDING THE ADDITION. THE REFORE THIS ADDITION IS DELETED. 14. THE NEXT ITEM RELATES TO WASHING MACHINE PURCHASED FOR A SUM OF ` 11 990/-. IT WAS THE SUBMISSION OF THE ASSESSEE BEFOR E THE LEARNED CIT (A) THAT IT HAS BEEN PURCHASED FOR EXIGENCIES IN T HE EVENT THAT A CASE REQUIRED URGENT SERVICE IN A SHORT DURATION. ACC ORDING TO LEARNED CIT (A) THIS HAS PROVIDED ENDURING BENEFIT TO THE ASSE SSEE AND HAS ENHANCED REVENUE. THE SINGLE ITEM OF WASHING MACHINE IN A BIG HOTEL AS PER REQUIREMENT OF A CUSTOMER CANNOT BE CALLED TO BE AN ITEM OF CAPITAL EXPENDITURE GIVING ENDURING BENEFIT TO THE ASSESSEE THEREFORE THE SAME IS ALSO DELETED. 15. THE NEXT ITEM RELATES TO MAINTENANCE AND REPAIR OF HEAT EXCHANGER OF FOR ` 1 81 500/-. A COPY OF INVOICE OF SUCH EXPENDITURE IS PLACED AT PAGE 6 OF THE PAPER BOOK. THE ASSESSEE HAS AL SO FILED A SMALL NOTE ON THE SAID DISALLOWANCE. IT HAS BEEN EXPLA INED THAT IT IS ONLY IN THE NATURE OF REGULAR MAINTENANCE AND REPLA CEMENT OF PARTS/COMPONENTS. THE INVOICES ALSO SHOWS LIKE THAT. TH EREFORE WE SEE NO JUSTIFICATION IN SUCH DISALLOWANCE WHICH IS DELE TED. 16. SO AS IT RELATES TO A DISALLOWANCE OF ` 14 84 790/ - SPENT ON COVERING THE EXISTING WOODEN FLOOR WITH 8 MM PLY WE DO NOT CONSIDER THAT THE SAID EXPENDITURE HAS GIVEN ANY ENDURING BENE FIT TO THE ASSESSEE PARTICULARLY KEEPING IN VIEW THAT IT HAS SAVED THE ASSESSEE FROM UNNECESSARY EXPENDITURE ON REPLACING THE SPOILED FLOORS ETC. INSTEAD OF INCURRING THE SAID EXPENDITURE THE ASSESSEE H AS RIGHTLY ITA NO.2589/DEL/2010 10 PROTECTED THE SAID FLOORS BY COVERING THE EXISTING FLO ORS WITH THE PLY. SUCH INCURRING OF EXPENDITURE HAS NOT PROVIDED ANY E NDURING BENEFIT TO THE ASSESSEE THEREFORE SUCH ADDITION IS NOT JUSTIFIED AN D IS DELETED. 17. WITH REGARD TO THE ADDITION OF ` 8 48 452/- TH ESE EXPENDITURES HAVE TO BE INCURRED BY THE ASSESSEE WHEN CONSTRUCTION/RE PAIR OF THE HOTEL IS GOING ON TO SAVE CUSTOMERS AND FOR REGULAR OP ERATION OF THE HOTEL FROM THE HAZARDS OF REPAIR OR CONSTRUCTION SUCH FENCING IS NECESSARY. IT WILL NOT PROVIDE ANY ENDURING BENEFIT TO THE ASSESSEE. THE NATURE OF SUCH EXPENDITURE HAS BEEN EXPLAINED BY THE LEARNED AR IN THE NOTE FILED BY HIM WHICH HAS ALREADY BEEN REPR ODUCED. THEREFORE THE DISALLOWANCE IS DELETED. 18. THE ASSESSING OFFICER WILL WITHDRAW THE DEPRECIATIO N GRANTED ON THESE EXPENDITURES AS THESE EXPENDITURES HAVE BEEN CONSID ERED TO BE REVENUE EXPENDITURE. 19. SO AS IT RELATES TO GROUND NO.2 IT HAS BEEN THE SU BMISSION OF LEARNED AR THAT THE SAME IS CONSEQUENTIAL. THE ASSESSING OFFICER IS DIRECTED TO RECOMPUTED THESE INTERESTS AFTER GIVING EF FECT TO THIS ORDER AS THESE INTERESTS ARE CONSEQUENTIAL IN NATURE. 20. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS AL LOWED IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.20 11. SD/- SD/- [A.K. GARODIA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 11.02.2011. DK ITA NO.2589/DEL/2010 11 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES DATE OF DICTATION 07.02.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 09.02.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH