The Commissioner Of Income Taxchennai v. Dr. Agarwal's Eye Hospital19, Cathedral Road

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR. JUSTICE R.SUDHAKARANDTHE HONOURABLE MS. JUSTICE K.B.K.VASUKI The Commissioner of Income TaxChennai....Appellant - Vs - Dr. Agarwal's Eye Hospital19, Cathedral Road Gopalapuram, Chennai 600 086....Respondent Appeal filed under Section 260-A of the Income Tax Act againstthe order dated 12.05.2014 passed by the Income Tax AppellateTribunal, Madras 'C' Bench, Chennai, made in ITA No.1178/Mds/2013 andappeal against the order of the Commissioner of Income Tax (Appeals)-IV, 121, M.G.Road, Chennai -34, made in ITA No.355/11-12/A-III dated08.02.2013 and appear against the Assessment order u/s 143 (3) forthe assessment year 2009-10 of the Assistant Commissioner of IncomeTax Company Circle I (4), Chennai, in PA/GIR No.AACD2373G dated22.12.2011. For Appellant: Ms. Vardhini Karthik for M/s. T.Ravikumar JUDGMENT(DELIVERED BY R.SUDHAKAR, J.) Aggrieved by the order of the Tribunal in dismissing the appealfiled by it, the appellant/Department is before this Court by filingthe present appeal raising the following questions of law :-"i) Whether on the facts and in the circumstances ofthe case, the Income Tax Appellate Tribunal was rightin upholding the order of the CIT (A), who disallowedexpenses of Rs.40,17,382/= on account of interiordecoration by holding that it was Revenue expenditureand not capital? https://hcservices.ecourts.gov.in/hcservices/ ii) Is not the finding of the Tribunal badespecially when on the analysis of the break up ofthe bills and expenditure incurred indicates variouscivil work done, painting, tile laying, plumbingworks, pest control and water proofing which are allof mostly in the nature of capital expenditure?" 2. The facts, in a nutshell, are as under :- The assessee is engaged in the business of running of eyehospitals. The assessee filed return of income for the assessmentyear 2009-2010, admitting total income of Rs.58,58,471/=. Theassessee, while claimed the expenses incurred towards interiordecoration as Revenue expenditure, however, the Assessing Officertreated the same as capital expenditure, against which the assesseepreferred appeal to the CIT (Appeals), which was allowed in favour ofthe assessee. Against the same, the Department preferred appeal tothe Tribunal, which was dismissed against which the present appeal isfiled. 3. When the matter was taken up, learned counsel appearing forthe appellant/Revenue fairly submitted before this Court that theissue raised in this appeal is squarely covered by the judgment ofthis Court in the assessee's own case in Commissioner of Income Tax,Chennai - Vs - Dr. Agarwal's Eye Hospital Limited (TCA No.562 of 2013dated 24.9.2013), wherein this Court held that the assessee, being aneye hospital, needs to have better ambience and for the comfortablestay of the patients, who visit the hospital and, therefore,incurring of the expenditure towards the betterment of the premisesmerits consideration as business expenditure. Accordingly, the issuewas held in favour of the assessee and against the Revenue. 4. This Court is in agreement with the above proposition of lawlaid down in the abovesaid decision and, therefore, this appeal isliable to be dismissed. Accordingly, this appeal, filed by theappellant/Revenue fails and the same is dismissed. GLN To 1. The Income Tax Appellate TribunalMadras 'C' BenchChennai. 2. The Commissioner of Income Tax (Appeals)- III, 121, M.G.Road, Chennai - 34. 3. The Assistant Commissioner of Income Tax,Company Circle (4), Chennai. 1 CC to T.Ravikumar , Advocate SR.No. 38294 1 CC to V.S.Jayakumar, Advocate SR.No. 38372 KJI (CO)PSI (11.08.2015) TCA No.549 of 2015