Shifting of Administrative Office :
Expenditure incurred for shifting the administrative office from one city to another city as a result of amalgamation of three companies having a number of activities in various centers is allowable as Revenue Expenditure.
Shifting of Head Office from one place to another is Capital Expenditure :
Where the assessee-company shifted its head office from one place to another place after it Board of Directors resolved that it would be commercially prudent to centralized the Registered Office of the company in one place, in connection with the shifting , it incurred huge expenses including a certain payment made to the lawyers, the expenses incurred on this account could not be on revenue account.
Expenditure of shifting of employees is Revenue Expenditure :
Expenditure incurred by assessee on shifting of employees to another place consequent on shifting of factory to another site due to labour unrest was allowable as Revenue Expenditure.
Decoration of reception / dining halls in Hotels is revenue expenditure :
Expenses incurred in putting up decorative mirrors in the wall, plaster molded roof, plywood panels, etc. in reception-cum dinning halls of a Hotel, in order to deep the place fir and attract customers, is deductible as revenue expenditure.
Expenditure on renovation an modernization of Hotel Premises is Revenue Expenditure :
Expenditure incurred solely for repairs and modernizing the Hotel and replacing the existing components of the building, furniture, and fittings, with a view to create a conductive and beautiful atmosphere for the purpose of running of a business of a Hotel , will fall under the category of Revenue Expenditure only, and is hence deductible.
Expenditure on Wall to Wall Carpet for office is capital expenditure :
Expenditure on purchase of wall-to-wall carpet, for being used in the office, has nothing to do with the augmenting, preserving or protecting the turnover or profits of the business and hence it is in the nature of capital expenditure.
Repairs to building can be capital or revenue, depending on nature of change brought about :
So long as the repair does not bring into existence an additional advantages or benefit of an enduring nature or change the nature, character or the identity of the building itself, the expenditure must be regarded as a revenue expenditure. On the other hand, if it does, it will be in the nature of a Capital Expenditure.
Replacement of Assets as a whole is not ‘Repair’ :
Where substantial repairs are carried out in order to put to use an existing asset, the same could be termed as Revenue Expenditure. But where there is replacement ‘As a Whole’ , it amounts to reconstruction and not repairs. It is pertinent that the asset in its old form must continue to exist to say that the expenditure involved in improving the assets is Revenue Expenditure. Where effacement takes place and a new asset comes into being, then expenditure involved would become a Capital Expenditure.
Repairs for converting Godown into Administrative Office :
Where the assessee incurred expenditure on repairs to a godown used for business purpose so as to convert it into an Administrative Office, the expenditure was allowable as revenue expenditure, since the business asset has retained its character and only its use had changed, and the use at both points of time, i.e. before and after the expenditure was incurred, related to the business of the assessee without there being any addition to or expansion of the profit-making apparatus of the assessee.
Remodeling of furniture in retail outlet is revenue expenditure :
The expenditure incurred by the assessee company towards the remodeling of furniture in its various retails depots which was necessitated by changes in design, was deductible as revenue expenditure.
Repair and replacement of false ceiling in cinema building is revenue expenditure :
Expenditure on repair and replacement of false ceiling in cinema building owned by the assessee was allowable as revenue expenditure, since it was incurred for keeping the business running.
Replacement of electric wiring in cinema building is revenue expenditure, since it was incurred for keeping the business running.
Expenditure in repairs to car damaged during riots are deductible :
Expenditure to repair damage to car in which director of assessee-company was traveling to the business premises, was allowable as business expenditure. |
