Ita/41/2014 Of M/S. Coastal Resorts (India) Ltd v. The Assistant Commissioner Of Income-Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THURSDAY, THE 20TH DAY OF MARCH 2014/29TH PHALGUNA, 1935 ITA.No. 41 of 2014 () ---------------------- ITA. NO.256/COCH/2013 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. ......... APPELLANT/APPELLANT: -------------------------------------- M/S. COASTAL RESORTS (INDIA) LTD., CASINO HOTEL, W/ ISLAND, KOCHI- 3, (PAN: ) BY SRI.JOSEPH MARKOSE, SENIOR ADVOCATE. ADVS. SRI.V.ABRAHAM MARKOS, SRI.BINU MATHEW, SRI.TOM THOMAS (KAKKUZHIYIL), SRI.ABRAHAM JOSEPH MARKOS, SRI.ABRAHAM VARGHESE THARAKAN. RESPONDENT/RESPONDENT: -------------------------------------------- THE ASSISTANT COMMISSIONER OF INCOME TAX, CORCLE -1(2), KOCHI -682 018. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 20-03-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. ITA.No. 41 of 2014 APPENDIX PETITIONER'S ANNEXURES:- ANNEXURE ACOPY OF THE GOVERNMENT ORDER DATED 28/02/2007TOGETHER WITH TRANSLATION AND A GIST THEREOF.TOGETHER WITH TRANSLATION AND A GIST THEREOF. ANNEXURE BCOPY OF THE LETTER DATED 30/03/2007 ISSUED BY THE TAHSILDAR, TALUK OFFICE, KOCHI TOGETHER WITH THE TRANSLATION THEREOF.TAHSILDAR, TALUK OFFICE, KOCHI TOGETHER WITH THE TRANSLATION THEREOF. ANNEXURE CCOPY OF THE INTERIM ORDER DATED 18/08/2009 OF THE KERALA HIGH COURT IN WP(C).NO. 11776/2007 FILED BY THE APPELLANT.KERALA HIGH COURT IN WP(C).NO. 11776/2007 FILED BY THE APPELLANT. ANNEXURE DCOPY OF THE ASSESSMENT ORDER DATED 15/12/2009PASSED BY THE RESPONDENT.PASSED BY THE RESPONDENT. ANNEXURE ECOPY OF THE APPELLATE ORDER DATED 08/03/2013 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-IIKOCHI.PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-IIKOCHI. ANNEXURE FCOPY OF THE APPEAL DATED 09/04/2013 PREFERRED BY THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH.THE APPELLANT BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH. ANNEXURE GCERTIFIED COPY OF THE IMPUGNED ORDER DATED 25/10/2013PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, KOCHIBENCH IN ITA. NO.256/COCH/2013.PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, KOCHIBENCH IN ITA. NO.256/COCH/2013. RESPONDENT'S ANNEXURES:- NIL. //TRUE COPY// P.S. TO JUDGE rs. MANJULA CHELLUR C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A. No.41 of 2014 = = = = = = = = = = = = = = = = = = = = = Dated this the 20 th day of March, 2014 JUDGMENT Shaffique, J This appeal is filed against the order passed by theIncome Tax Appellate Tribunal, Cochin Bench in ITANo.256/Coch/2013. The assessment year under considerationis 2007-08. 2. The facts involved in the case would show that theassessee took a certain extent of land on lease fromGovernment of Kerala and constructed a building for business purpose. After the expiry of the lease period, the Governmentdid not extend the lease. This matter was under challengebefore this Court and there was a stay of the directions issuedby the Government and a direction to maintain status quo. 3. During the year under consideration, the assesseeclaimed written down value of cost of construction as revenue expenditure, under the head ‘current repair’. This was not permitted by the assessing officer. Matter was confirmed inappeal and further, matter was carried in appeal before theTribunal. 4. The Tribunal found that the assessee continuing in 2. The facts involved in the case would show that theassessee took a certain extent of land on lease fromGovernment of Kerala and constructed a building for business purpose. After the expiry of the lease period, the Governmentdid not extend the lease. This matter was under challengebefore this Court and there was a stay of the directions issuedby the Government and a direction to maintain status quo. 3. During the year under consideration, the assesseeclaimed written down value of cost of construction as revenue expenditure, under the head ‘current repair’. This was not permitted by the assessing officer. Matter was confirmed inappeal and further, matter was carried in appeal before theTribunal. 4. The Tribunal found that the assessee continuing in possession of the property after expiry of the lease period hasto be construed as holding over of the property after expiry oflease period. Therefore, there is no question of allowing thewritten down value and cost of construction as 'currentrepair'. Further it is found that, 'current repair' is anexpenditure incurred by the assessee for the purpose ofmaintaining machinery, building etc. used for the purpose ofbusiness and therefore it cannot be the written down value ofcost of construction. The Tribunal also came to the findingthat the judgment relied upon by the assessee in TVS LeanLogistics Ltd 293 ITR 432 (Mad) has no application to thefacts of the case. 5. It is apparently clear that assessee cannot claim thebenefit of written down value of cost of construction which he I.T.A. No.41 of 2014 had incurred under the head 'current repairs'. Hence, we donot think that any question of law arises for consideration inthis appeal. Accordingly, the appeal is dismissed. MANJULA CHELLUR,CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE. sj21/3