Semantic Analysis by spaCy
Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd.
Decided On : Jun-27-2007
Court : Chennai
Notice (8): Undefined index: topics [APP/View/Case/meta.ctp, line 36]Code Context$shops2 = $shops['topics'];$viewFile = '/home/legalcrystal/app/View/Case/meta.ctp' $dataForView = array( 'title_for_layout' => 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd. Semantic Analysis', 'shops' => array( 'LAW' => array( (int) 0 => 'Explanation 1 to Section 32(1', (int) 1 => 'the Income Tax Act', (int) 2 => 'Explanation 1 to Section 32(1', (int) 3 => 'Explanation 1', (int) 4 => 'the Explanation 1 to Section 32(1', (int) 5 => 'Explanation 1 to Section 32(1', (int) 6 => 'the Explanation 1 to Section 32(1' ), 'ORG' => array( (int) 0 => 'P.D. Dinakaran', (int) 1 => 'Tribunal', (int) 2 => 'Tribunal', (int) 3 => 'the Taxation Laws (Amendment and Miscellaneous Provisions', (int) 4 => '-(i', (int) 5 => 'Court', (int) 6 => 'Court', (int) 7 => 'Court', (int) 8 => 'Punjab National Bank', (int) 9 => 'The Apex Court', (int) 10 => 'L.H. 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(A) Nos. 876 and 877 of 2007', 'appellant' => 'Commissioner of Income Tax', 'authreffered' => '', 'casename' => 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd.', 'casenote' => ' - LAND ACQUISITION ACT, 1894 [C.A. No. 1/1894]. Sections 5A & 4; [P. Sathasivam, M.E.N. Patrudu & S. Manikumar, JJ] Land Acquisition (Tamil Nadu) Rules, Rule 4 Time limit for filing objections Held, Time limit prescribed under Section 5-A for filing objections cannot be further enlarged by Form B Notice issued under Rule 4. Authorities were directed to modify Form B. Sections 5A (2); [ Hearing of objectors - Held, It is mandatory and making a further enquiry by the Collector is discretionary. If the objectors have not filed any objection with8in 30 days but come forward with oral objection, even then, the Collector must hear. The hearing is mandatory', 'caseanalysis' => null, 'casesref' => 'Commissioner of Income Tax v. Bombay Dyeing and;', 'citingcases' => '', 'counselplain' => 'Pushya Sitaraman, Sr. S.C.', 'counseldef' => '', 'court' => 'Chennai', 'court_type' => 'HC', 'decidedon' => '2007-06-27', 'deposition' => 'Appeal dismissed', 'favorof' => null, 'findings' => null, 'judge' => 'P.D. Dinakaran and ;P.P.S. Janarthana Raja, JJ.', 'judgement' => '<p style="text-align: justify;">P.D. Dinakaran, J.</p><p style="text-align: justify;">1. The Revenue has preferred these appeals on a vexed substantial question of law as to whether the expenditure on construction of building in a leasehold premises would amount to revenue expenditure, contrary to the clear provisions of Explanation 1 to Section 32(1) of the Income Tax Act, under the following facts and circumstances of the case.</p><p style="text-align: justify;">2.1. The relevant assessment years are 2001-02 and 2002-03 respectively. The assessee claimed the expenditure incurred by it on construction of a building, concededly on leasehold land, as revenue in nature. But, the Assessing Officer treated it as capital expenditure by orders dated 23.3.2004 and 7.2.2005 respectively. Against the said orders, the assessee preferred appeals, which were, by common order dated 21.9.2005 dismissed by the Commissioner, upholding the order of the Assessing Officer. </p><p style="text-align: justify;">2.2. Contending that Explanation 1 to Section 32(1) of the Act would cover the situations of construction on premises taken on lease, since the assessee was not the owner of the building, the expenditure could only be treated as revenue in nature, the assessee preferred further appeals before the Tribunal. Appreciating the contention made on behalf of the assessee, the Tribunal allowed the appeal and held that the expenditure incurred by the assessee on the construction of the building on the leasehold land was not attracted by Explanation 1 to Section 32(1) of the Act, as it was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 1.4.1988 and therefore, the said expenditure was revenue in nature. Hence, the present appeal raising the above mentioned substantial question of law.</p><p style="text-align: justify;">3. Before proceeding further, it is apt to refer Explanation 1 of Section 32(1) of the Act. </p><p style="text-align: justify;">32. Depreciation</p><p style="text-align: justify;">(1) In respect of depreciation of -</p><p style="text-align: justify;">(i) buildings, machinery, plant or furniture, being tangible assets;</p><p style="text-align: justify;">(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,</p><p style="text-align: justify;">owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -</p><p style="text-align: justify;">(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed;</p><p style="text-align: justify;">(ii)in the case of any block of assets, such percentage on the written down value thereof as may be prescribed:.</p><p style="text-align: justify;">Explanation 1 - Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee..</p><p style="text-align: justify;">4.1. It is not in dispute that the assessee had put up the impugned construction of building only on the leasehold land and no building was taken on lease by the assessee. Therefore, the fiction created by Explanation 1 that the building put up by him in the leasehold land or structure or work shall be construed as if the same is owned by the assessee, is not applicable to the case of the assessee and the Explanation 1 to Section 32(1) of the Act is not attracted to the instant case of the assessee at all. </p><p style="text-align: justify;">4.2. Of course, an argument was advanced on behalf of the Revenue that the words 'where the business or profession is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy' would also include lands and would be read as 'where the business or profession of the assessee is carried on in a land not owned by him but in respect of which the assessee holds a lease or other right of occupancy' and in such case, explanation 1 to Section 32(1) of the Act is squarely applicable to the instant case of the assessee. But, we are unable to appreciate the said argument. In a case where the statutory provision is plain and unambiguous, the Court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom; and it is well known that the Court can iron out the creases but it cannot change the texture of the fabric, cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous, cannot add or subtract words to a statute or read something into it which is not there and cannot rewrite or recast legislation, vide Nasiruddin v. Sita Ram Agarwal : [2003]1SCR634 . </p><p style="text-align: justify;">4.3. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule and even if the literal interpretation results in hardship or inconvenience, it has to be followed. The language employed in a statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used in the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result and any departure from the literal rule would really be amending the law in the garb of interpretation, which is not permissible and which would be destructive of judicial discipline, vide Raghunath Rai Bareja v. Punjab National Bank : (2007)2SCC230 .</p><p style="text-align: justify;">4.4. What constitutes a capital expenditure and what does not, to attract Explanation 1 to Section 32(1) of the Act depends upon the construction of any structure or doing any work or in relation to and by way of renovation, extension or improvement to the building which is put up in a building taken on lease by him for carrying on his business and profession of the assessee, but not in a case of construction of any structure or doing any work or relation to where such building is put up/constructed for the purpose of business or the profession of the assessee in a land taken on lease by the assessee. Because the assessee did not acquire a capital asset, viz. the land in the instant case, but have put up a construction of the building only for the business advantage, with the result the entire construction cost is admissible as the revenue expenditure.</p><p style="text-align: justify;">4.5. The Apex Court in L.H. Sugar Factory and Oil Mills (P) Ltd. v. Commissioner of Income Tax : [1980]125ITR293(SC) held that the construction of roads in the case of Sugar Mill as revenue expenditure. Similarly, contribution to the State Housing Board for construction of tenements for the workers also held to be the revenue expenditure by the Apex Court in the case of Commissioner of Income Tax v. Bombay Dyeing and . : [1996]219ITR521(SC) . </p><p style="text-align: justify;">4.6. Seeing through the pipelines of the above ratio in the facts and circumstances of the instant case, we do not see any substantial question of law as raised by the Tribunal, for our consideration, as the Explanation 1 to </p><p style="text-align: justify;">Section 32(1) of the Act is not attracted. Accordingly, these appeals are dismissed. Consequently, M.P. No. 1 of 2007 is also dismissed. <p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => '', 'pubs' => '(2007)212CTR(Mad)523; [2007]293ITR432(Mad)', 'ratiodecidendi' => '', 'respondent' => 'Tvs Lean Logistics Ltd.', 'sub' => 'Direct Taxation', 'link' => null, 'circuit' => null ) ), 'args' => array( (int) 0 => '838732' ) ) $title_for_layout = 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd. Semantic Analysis' $shops = array( 'LAW' => array( (int) 0 => 'Explanation 1 to Section 32(1', (int) 1 => 'the Income Tax Act', (int) 2 => 'Explanation 1 to Section 32(1', (int) 3 => 'Explanation 1', (int) 4 => 'the Explanation 1 to Section 32(1', (int) 5 => 'Explanation 1 to Section 32(1', (int) 6 => 'the Explanation 1 to Section 32(1' ), 'ORG' => array( (int) 0 => 'P.D. Dinakaran', (int) 1 => 'Tribunal', (int) 2 => 'Tribunal', (int) 3 => 'the Taxation Laws (Amendment and Miscellaneous Provisions', (int) 4 => '-(i', (int) 5 => 'Court', (int) 6 => 'Court', (int) 7 => 'Court', (int) 8 => 'Punjab National Bank', (int) 9 => 'The Apex Court', (int) 10 => 'L.H. Sugar Factory', (int) 11 => 'Oil Mills', (int) 12 => 'the State Housing Board', (int) 13 => 'the Apex Court', (int) 14 => 'Income Tax', (int) 15 => 'Tribunal', (int) 16 => 'M.P. 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(A) Nos. 876 and 877 of 2007', 'appellant' => 'Commissioner of Income Tax', 'authreffered' => '', 'casename' => 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd.', 'casenote' => ' - LAND ACQUISITION ACT, 1894 [C.A. No. 1/1894]. Sections 5A & 4; [P. Sathasivam, M.E.N. Patrudu & S. Manikumar, JJ] Land Acquisition (Tamil Nadu) Rules, Rule 4 Time limit for filing objections Held, Time limit prescribed under Section 5-A for filing objections cannot be further enlarged by Form B Notice issued under Rule 4. Authorities were directed to modify Form B. Sections 5A (2); [ Hearing of objectors - Held, It is mandatory and making a further enquiry by the Collector is discretionary. If the objectors have not filed any objection with8in 30 days but come forward with oral objection, even then, the Collector must hear. The hearing is mandatory', 'caseanalysis' => null, 'casesref' => 'Commissioner of Income Tax v. Bombay Dyeing and;', 'citingcases' => '', 'counselplain' => 'Pushya Sitaraman, Sr. S.C.', 'counseldef' => '', 'court' => 'Chennai', 'court_type' => 'HC', 'decidedon' => '2007-06-27', 'deposition' => 'Appeal dismissed', 'favorof' => null, 'findings' => null, 'judge' => 'P.D. Dinakaran and ;P.P.S. Janarthana Raja, JJ.', 'judgement' => '<p style="text-align: justify;">P.D. Dinakaran, J.</p><p style="text-align: justify;">1. The Revenue has preferred these appeals on a vexed substantial question of law as to whether the expenditure on construction of building in a leasehold premises would amount to revenue expenditure, contrary to the clear provisions of Explanation 1 to Section 32(1) of the Income Tax Act, under the following facts and circumstances of the case.</p><p style="text-align: justify;">2.1. The relevant assessment years are 2001-02 and 2002-03 respectively. The assessee claimed the expenditure incurred by it on construction of a building, concededly on leasehold land, as revenue in nature. But, the Assessing Officer treated it as capital expenditure by orders dated 23.3.2004 and 7.2.2005 respectively. Against the said orders, the assessee preferred appeals, which were, by common order dated 21.9.2005 dismissed by the Commissioner, upholding the order of the Assessing Officer. </p><p style="text-align: justify;">2.2. Contending that Explanation 1 to Section 32(1) of the Act would cover the situations of construction on premises taken on lease, since the assessee was not the owner of the building, the expenditure could only be treated as revenue in nature, the assessee preferred further appeals before the Tribunal. Appreciating the contention made on behalf of the assessee, the Tribunal allowed the appeal and held that the expenditure incurred by the assessee on the construction of the building on the leasehold land was not attracted by Explanation 1 to Section 32(1) of the Act, as it was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 1.4.1988 and therefore, the said expenditure was revenue in nature. Hence, the present appeal raising the above mentioned substantial question of law.</p><p style="text-align: justify;">3. Before proceeding further, it is apt to refer Explanation 1 of Section 32(1) of the Act. </p><p style="text-align: justify;">32. Depreciation</p><p style="text-align: justify;">(1) In respect of depreciation of -</p><p style="text-align: justify;">(i) buildings, machinery, plant or furniture, being tangible assets;</p><p style="text-align: justify;">(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,</p><p style="text-align: justify;">owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -</p><p style="text-align: justify;">(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed;</p><p style="text-align: justify;">(ii)in the case of any block of assets, such percentage on the written down value thereof as may be prescribed:.</p><p style="text-align: justify;">Explanation 1 - Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee..</p><p style="text-align: justify;">4.1. It is not in dispute that the assessee had put up the impugned construction of building only on the leasehold land and no building was taken on lease by the assessee. Therefore, the fiction created by Explanation 1 that the building put up by him in the leasehold land or structure or work shall be construed as if the same is owned by the assessee, is not applicable to the case of the assessee and the Explanation 1 to Section 32(1) of the Act is not attracted to the instant case of the assessee at all. </p><p style="text-align: justify;">4.2. Of course, an argument was advanced on behalf of the Revenue that the words 'where the business or profession is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy' would also include lands and would be read as 'where the business or profession of the assessee is carried on in a land not owned by him but in respect of which the assessee holds a lease or other right of occupancy' and in such case, explanation 1 to Section 32(1) of the Act is squarely applicable to the instant case of the assessee. But, we are unable to appreciate the said argument. In a case where the statutory provision is plain and unambiguous, the Court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom; and it is well known that the Court can iron out the creases but it cannot change the texture of the fabric, cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous, cannot add or subtract words to a statute or read something into it which is not there and cannot rewrite or recast legislation, vide Nasiruddin v. Sita Ram Agarwal : [2003]1SCR634 . </p><p style="text-align: justify;">4.3. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule and even if the literal interpretation results in hardship or inconvenience, it has to be followed. The language employed in a statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used in the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result and any departure from the literal rule would really be amending the law in the garb of interpretation, which is not permissible and which would be destructive of judicial discipline, vide Raghunath Rai Bareja v. Punjab National Bank : (2007)2SCC230 .</p><p style="text-align: justify;">4.4. What constitutes a capital expenditure and what does not, to attract Explanation 1 to Section 32(1) of the Act depends upon the construction of any structure or doing any work or in relation to and by way of renovation, extension or improvement to the building which is put up in a building taken on lease by him for carrying on his business and profession of the assessee, but not in a case of construction of any structure or doing any work or relation to where such building is put up/constructed for the purpose of business or the profession of the assessee in a land taken on lease by the assessee. Because the assessee did not acquire a capital asset, viz. the land in the instant case, but have put up a construction of the building only for the business advantage, with the result the entire construction cost is admissible as the revenue expenditure.</p><p style="text-align: justify;">4.5. The Apex Court in L.H. Sugar Factory and Oil Mills (P) Ltd. v. Commissioner of Income Tax : [1980]125ITR293(SC) held that the construction of roads in the case of Sugar Mill as revenue expenditure. Similarly, contribution to the State Housing Board for construction of tenements for the workers also held to be the revenue expenditure by the Apex Court in the case of Commissioner of Income Tax v. Bombay Dyeing and . : [1996]219ITR521(SC) . </p><p style="text-align: justify;">4.6. Seeing through the pipelines of the above ratio in the facts and circumstances of the instant case, we do not see any substantial question of law as raised by the Tribunal, for our consideration, as the Explanation 1 to </p><p style="text-align: justify;">Section 32(1) of the Act is not attracted. Accordingly, these appeals are dismissed. Consequently, M.P. No. 1 of 2007 is also dismissed. <p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => '', 'pubs' => '(2007)212CTR(Mad)523; [2007]293ITR432(Mad)', 'ratiodecidendi' => '', 'respondent' => 'Tvs Lean Logistics Ltd.', 'sub' => 'Direct Taxation', 'link' => null, 'circuit' => null ) ) $args = array( (int) 0 => '838732' ) $pattern = '/\(((0[1-9]|[12][0-9]|3[01])[.](0[1-9]|1[012])[.](17|18|19|20)[0-9]{2}).*\)/'include - APP/View/Case/meta.ctp, line 36 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
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(A) Nos. 876 and 877 of 2007', 'appellant' => 'Commissioner of Income Tax', 'authreffered' => '', 'casename' => 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd.', 'casenote' => ' - LAND ACQUISITION ACT, 1894 [C.A. No. 1/1894]. Sections 5A & 4; [P. Sathasivam, M.E.N. Patrudu & S. Manikumar, JJ] Land Acquisition (Tamil Nadu) Rules, Rule 4 Time limit for filing objections Held, Time limit prescribed under Section 5-A for filing objections cannot be further enlarged by Form B Notice issued under Rule 4. Authorities were directed to modify Form B. Sections 5A (2); [ Hearing of objectors - Held, It is mandatory and making a further enquiry by the Collector is discretionary. If the objectors have not filed any objection with8in 30 days but come forward with oral objection, even then, the Collector must hear. The hearing is mandatory', 'caseanalysis' => null, 'casesref' => 'Commissioner of Income Tax v. Bombay Dyeing and;', 'citingcases' => '', 'counselplain' => 'Pushya Sitaraman, Sr. S.C.', 'counseldef' => '', 'court' => 'Chennai', 'court_type' => 'HC', 'decidedon' => '2007-06-27', 'deposition' => 'Appeal dismissed', 'favorof' => null, 'findings' => null, 'judge' => 'P.D. Dinakaran and ;P.P.S. Janarthana Raja, JJ.', 'judgement' => '<p style="text-align: justify;">P.D. Dinakaran, J.</p><p style="text-align: justify;">1. The Revenue has preferred these appeals on a vexed substantial question of law as to whether the expenditure on construction of building in a leasehold premises would amount to revenue expenditure, contrary to the clear provisions of Explanation 1 to Section 32(1) of the Income Tax Act, under the following facts and circumstances of the case.</p><p style="text-align: justify;">2.1. The relevant assessment years are 2001-02 and 2002-03 respectively. The assessee claimed the expenditure incurred by it on construction of a building, concededly on leasehold land, as revenue in nature. But, the Assessing Officer treated it as capital expenditure by orders dated 23.3.2004 and 7.2.2005 respectively. Against the said orders, the assessee preferred appeals, which were, by common order dated 21.9.2005 dismissed by the Commissioner, upholding the order of the Assessing Officer. </p><p style="text-align: justify;">2.2. Contending that Explanation 1 to Section 32(1) of the Act would cover the situations of construction on premises taken on lease, since the assessee was not the owner of the building, the expenditure could only be treated as revenue in nature, the assessee preferred further appeals before the Tribunal. Appreciating the contention made on behalf of the assessee, the Tribunal allowed the appeal and held that the expenditure incurred by the assessee on the construction of the building on the leasehold land was not attracted by Explanation 1 to Section 32(1) of the Act, as it was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 1.4.1988 and therefore, the said expenditure was revenue in nature. Hence, the present appeal raising the above mentioned substantial question of law.</p><p style="text-align: justify;">3. Before proceeding further, it is apt to refer Explanation 1 of Section 32(1) of the Act. </p><p style="text-align: justify;">32. Depreciation</p><p style="text-align: justify;">(1) In respect of depreciation of -</p><p style="text-align: justify;">(i) buildings, machinery, plant or furniture, being tangible assets;</p><p style="text-align: justify;">(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,</p><p style="text-align: justify;">owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -</p><p style="text-align: justify;">(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed;</p><p style="text-align: justify;">(ii)in the case of any block of assets, such percentage on the written down value thereof as may be prescribed:.</p><p style="text-align: justify;">Explanation 1 - Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee..</p><p style="text-align: justify;">4.1. It is not in dispute that the assessee had put up the impugned construction of building only on the leasehold land and no building was taken on lease by the assessee. Therefore, the fiction created by Explanation 1 that the building put up by him in the leasehold land or structure or work shall be construed as if the same is owned by the assessee, is not applicable to the case of the assessee and the Explanation 1 to Section 32(1) of the Act is not attracted to the instant case of the assessee at all. </p><p style="text-align: justify;">4.2. Of course, an argument was advanced on behalf of the Revenue that the words 'where the business or profession is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy' would also include lands and would be read as 'where the business or profession of the assessee is carried on in a land not owned by him but in respect of which the assessee holds a lease or other right of occupancy' and in such case, explanation 1 to Section 32(1) of the Act is squarely applicable to the instant case of the assessee. But, we are unable to appreciate the said argument. In a case where the statutory provision is plain and unambiguous, the Court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom; and it is well known that the Court can iron out the creases but it cannot change the texture of the fabric, cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous, cannot add or subtract words to a statute or read something into it which is not there and cannot rewrite or recast legislation, vide Nasiruddin v. Sita Ram Agarwal : [2003]1SCR634 . </p><p style="text-align: justify;">4.3. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule and even if the literal interpretation results in hardship or inconvenience, it has to be followed. The language employed in a statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used in the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result and any departure from the literal rule would really be amending the law in the garb of interpretation, which is not permissible and which would be destructive of judicial discipline, vide Raghunath Rai Bareja v. Punjab National Bank : (2007)2SCC230 .</p><p style="text-align: justify;">4.4. What constitutes a capital expenditure and what does not, to attract Explanation 1 to Section 32(1) of the Act depends upon the construction of any structure or doing any work or in relation to and by way of renovation, extension or improvement to the building which is put up in a building taken on lease by him for carrying on his business and profession of the assessee, but not in a case of construction of any structure or doing any work or relation to where such building is put up/constructed for the purpose of business or the profession of the assessee in a land taken on lease by the assessee. Because the assessee did not acquire a capital asset, viz. the land in the instant case, but have put up a construction of the building only for the business advantage, with the result the entire construction cost is admissible as the revenue expenditure.</p><p style="text-align: justify;">4.5. The Apex Court in L.H. Sugar Factory and Oil Mills (P) Ltd. v. Commissioner of Income Tax : [1980]125ITR293(SC) held that the construction of roads in the case of Sugar Mill as revenue expenditure. Similarly, contribution to the State Housing Board for construction of tenements for the workers also held to be the revenue expenditure by the Apex Court in the case of Commissioner of Income Tax v. Bombay Dyeing and . : [1996]219ITR521(SC) . </p><p style="text-align: justify;">4.6. Seeing through the pipelines of the above ratio in the facts and circumstances of the instant case, we do not see any substantial question of law as raised by the Tribunal, for our consideration, as the Explanation 1 to </p><p style="text-align: justify;">Section 32(1) of the Act is not attracted. Accordingly, these appeals are dismissed. Consequently, M.P. No. 1 of 2007 is also dismissed. <p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => '', 'pubs' => '(2007)212CTR(Mad)523; [2007]293ITR432(Mad)', 'ratiodecidendi' => '', 'respondent' => 'Tvs Lean Logistics Ltd.', 'sub' => 'Direct Taxation', 'link' => null, 'circuit' => null ) ), 'args' => array( (int) 0 => '838732' ) ) $title_for_layout = 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd. Semantic Analysis' $shops = array( 'LAW' => array( (int) 0 => 'Explanation 1 to Section 32(1', (int) 1 => 'the Income Tax Act', (int) 2 => 'Explanation 1 to Section 32(1', (int) 3 => 'Explanation 1', (int) 4 => 'the Explanation 1 to Section 32(1', (int) 5 => 'Explanation 1 to Section 32(1', (int) 6 => 'the Explanation 1 to Section 32(1' ), 'ORG' => array( (int) 0 => 'P.D. Dinakaran', (int) 1 => 'Tribunal', (int) 2 => 'Tribunal', (int) 3 => 'the Taxation Laws (Amendment and Miscellaneous Provisions', (int) 4 => '-(i', (int) 5 => 'Court', (int) 6 => 'Court', (int) 7 => 'Court', (int) 8 => 'Punjab National Bank', (int) 9 => 'The Apex Court', (int) 10 => 'L.H. Sugar Factory', (int) 11 => 'Oil Mills', (int) 12 => 'the State Housing Board', (int) 13 => 'the Apex Court', (int) 14 => 'Income Tax', (int) 15 => 'Tribunal', (int) 16 => 'M.P. No' ), 'NORP' => array( (int) 0 => 'J.1' ), 'DATE' => array( (int) 0 => 'years', (int) 1 => '2001-02', (int) 2 => '2002-03', (int) 3 => '1986', (int) 4 => '32', (int) 5 => 'the 1st day of April', (int) 6 => '2007' ), 'CARDINAL' => array( (int) 0 => '23.3.2004', (int) 1 => '7.2.2005', (int) 2 => '21.9.2005', (int) 3 => '2.2', (int) 4 => '1.4.1988', (int) 5 => '4.1', (int) 6 => '4.2', (int) 7 => '1', (int) 8 => '2003]1SCR634', (int) 9 => '4.3', (int) 10 => '2007)2SCC230', (int) 11 => '1980]125ITR293(SC', (int) 12 => '1996]219ITR521(SC', (int) 13 => '4.6', (int) 14 => '1' ), 'PRODUCT' => array( (int) 0 => 'Explanation 1 of Section 32(1' ), 'GPE' => array( (int) 0 => 'Nasiruddin' ), 'PERSON' => array( (int) 0 => 'Sita Ram Agarwal', (int) 1 => 'Raghunath Rai Bareja v.', (int) 2 => 'Sugar Mill', (int) 3 => 'Bombay Dyeing' ), 'ORDINAL' => array( (int) 0 => 'first' ) ) $desc = array( 'Judgement' => array( 'id' => '838732', 'acts' => 'Income Tax Act - Sections 32(1); Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986', 'appealno' => 'T.C. (A) Nos. 876 and 877 of 2007', 'appellant' => 'Commissioner of Income Tax', 'authreffered' => '', 'casename' => 'Commissioner of Income Tax Vs. Tvs Lean Logistics Ltd.', 'casenote' => ' - LAND ACQUISITION ACT, 1894 [C.A. No. 1/1894]. Sections 5A & 4; [P. Sathasivam, M.E.N. Patrudu & S. Manikumar, JJ] Land Acquisition (Tamil Nadu) Rules, Rule 4 Time limit for filing objections Held, Time limit prescribed under Section 5-A for filing objections cannot be further enlarged by Form B Notice issued under Rule 4. Authorities were directed to modify Form B. Sections 5A (2); [ Hearing of objectors - Held, It is mandatory and making a further enquiry by the Collector is discretionary. If the objectors have not filed any objection with8in 30 days but come forward with oral objection, even then, the Collector must hear. The hearing is mandatory', 'caseanalysis' => null, 'casesref' => 'Commissioner of Income Tax v. Bombay Dyeing and;', 'citingcases' => '', 'counselplain' => 'Pushya Sitaraman, Sr. S.C.', 'counseldef' => '', 'court' => 'Chennai', 'court_type' => 'HC', 'decidedon' => '2007-06-27', 'deposition' => 'Appeal dismissed', 'favorof' => null, 'findings' => null, 'judge' => 'P.D. Dinakaran and ;P.P.S. Janarthana Raja, JJ.', 'judgement' => '<p style="text-align: justify;">P.D. Dinakaran, J.</p><p style="text-align: justify;">1. The Revenue has preferred these appeals on a vexed substantial question of law as to whether the expenditure on construction of building in a leasehold premises would amount to revenue expenditure, contrary to the clear provisions of Explanation 1 to Section 32(1) of the Income Tax Act, under the following facts and circumstances of the case.</p><p style="text-align: justify;">2.1. The relevant assessment years are 2001-02 and 2002-03 respectively. The assessee claimed the expenditure incurred by it on construction of a building, concededly on leasehold land, as revenue in nature. But, the Assessing Officer treated it as capital expenditure by orders dated 23.3.2004 and 7.2.2005 respectively. Against the said orders, the assessee preferred appeals, which were, by common order dated 21.9.2005 dismissed by the Commissioner, upholding the order of the Assessing Officer. </p><p style="text-align: justify;">2.2. Contending that Explanation 1 to Section 32(1) of the Act would cover the situations of construction on premises taken on lease, since the assessee was not the owner of the building, the expenditure could only be treated as revenue in nature, the assessee preferred further appeals before the Tribunal. Appreciating the contention made on behalf of the assessee, the Tribunal allowed the appeal and held that the expenditure incurred by the assessee on the construction of the building on the leasehold land was not attracted by Explanation 1 to Section 32(1) of the Act, as it was inserted by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 with effect from 1.4.1988 and therefore, the said expenditure was revenue in nature. Hence, the present appeal raising the above mentioned substantial question of law.</p><p style="text-align: justify;">3. Before proceeding further, it is apt to refer Explanation 1 of Section 32(1) of the Act. </p><p style="text-align: justify;">32. Depreciation</p><p style="text-align: justify;">(1) In respect of depreciation of -</p><p style="text-align: justify;">(i) buildings, machinery, plant or furniture, being tangible assets;</p><p style="text-align: justify;">(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,</p><p style="text-align: justify;">owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the following deductions shall be allowed -</p><p style="text-align: justify;">(i) in the case of assets of an undertaking engaged in generation or generation and distribution of power, such percentage on the actual cost thereof to the assessee as may be prescribed;</p><p style="text-align: justify;">(ii)in the case of any block of assets, such percentage on the written down value thereof as may be prescribed:.</p><p style="text-align: justify;">Explanation 1 - Where the business or profession of the assessee is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy and any capital expenditure is incurred by the assessee for the purposes of the business or profession on the construction of any structure or doing of any work in or in relation to, and by way of renovation or extension of, or improvement to, the building, then, the provisions of this clause shall apply as if the said structure or work is a building owned by the assessee..</p><p style="text-align: justify;">4.1. It is not in dispute that the assessee had put up the impugned construction of building only on the leasehold land and no building was taken on lease by the assessee. Therefore, the fiction created by Explanation 1 that the building put up by him in the leasehold land or structure or work shall be construed as if the same is owned by the assessee, is not applicable to the case of the assessee and the Explanation 1 to Section 32(1) of the Act is not attracted to the instant case of the assessee at all. </p><p style="text-align: justify;">4.2. Of course, an argument was advanced on behalf of the Revenue that the words 'where the business or profession is carried on in a building not owned by him but in respect of which the assessee holds a lease or other right of occupancy' would also include lands and would be read as 'where the business or profession of the assessee is carried on in a land not owned by him but in respect of which the assessee holds a lease or other right of occupancy' and in such case, explanation 1 to Section 32(1) of the Act is squarely applicable to the instant case of the assessee. But, we are unable to appreciate the said argument. In a case where the statutory provision is plain and unambiguous, the Court shall not interpret the same in a different manner, only because of harsh consequences arising therefrom; and it is well known that the Court can iron out the creases but it cannot change the texture of the fabric, cannot enlarge the scope of legislation or intention when the language of the provision is plain and unambiguous, cannot add or subtract words to a statute or read something into it which is not there and cannot rewrite or recast legislation, vide Nasiruddin v. Sita Ram Agarwal : [2003]1SCR634 . </p><p style="text-align: justify;">4.3. Similarly, there should be a literal rule of interpretation of a statute, which is the first and foremost principle of interpretation and where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule and even if the literal interpretation results in hardship or inconvenience, it has to be followed. The language employed in a statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used in the legislature, the Court cannot correct or make up the deficiency, especially when a literal reading thereof produces an intelligible result and any departure from the literal rule would really be amending the law in the garb of interpretation, which is not permissible and which would be destructive of judicial discipline, vide Raghunath Rai Bareja v. Punjab National Bank : (2007)2SCC230 .</p><p style="text-align: justify;">4.4. What constitutes a capital expenditure and what does not, to attract Explanation 1 to Section 32(1) of the Act depends upon the construction of any structure or doing any work or in relation to and by way of renovation, extension or improvement to the building which is put up in a building taken on lease by him for carrying on his business and profession of the assessee, but not in a case of construction of any structure or doing any work or relation to where such building is put up/constructed for the purpose of business or the profession of the assessee in a land taken on lease by the assessee. Because the assessee did not acquire a capital asset, viz. the land in the instant case, but have put up a construction of the building only for the business advantage, with the result the entire construction cost is admissible as the revenue expenditure.</p><p style="text-align: justify;">4.5. The Apex Court in L.H. Sugar Factory and Oil Mills (P) Ltd. v. Commissioner of Income Tax : [1980]125ITR293(SC) held that the construction of roads in the case of Sugar Mill as revenue expenditure. Similarly, contribution to the State Housing Board for construction of tenements for the workers also held to be the revenue expenditure by the Apex Court in the case of Commissioner of Income Tax v. Bombay Dyeing and . : [1996]219ITR521(SC) . </p><p style="text-align: justify;">4.6. Seeing through the pipelines of the above ratio in the facts and circumstances of the instant case, we do not see any substantial question of law as raised by the Tribunal, for our consideration, as the Explanation 1 to </p><p style="text-align: justify;">Section 32(1) of the Act is not attracted. Accordingly, these appeals are dismissed. Consequently, M.P. No. 1 of 2007 is also dismissed. <p style="text-align: justify;"></p><p style="text-align: justify;">', 'observations' => null, 'overruledby' => null, 'prhistory' => '', 'pubs' => '(2007)212CTR(Mad)523; [2007]293ITR432(Mad)', 'ratiodecidendi' => '', 'respondent' => 'Tvs Lean Logistics Ltd.', 'sub' => 'Direct Taxation', 'link' => null, 'circuit' => null ) ) $args = array( (int) 0 => '838732' ) $pattern = '/\(((0[1-9]|[12][0-9]|3[01])[.](0[1-9]|1[012])[.](17|18|19|20)[0-9]{2}).*\)/' $shops2 = nullinclude - APP/View/Case/meta.ctp, line 39 View::_evaluate() - CORE/Cake/View/View.php, line 971 View::_render() - CORE/Cake/View/View.php, line 933 View::render() - CORE/Cake/View/View.php, line 473 Controller::render() - CORE/Cake/Controller/Controller.php, line 963 Dispatcher::_invoke() - CORE/Cake/Routing/Dispatcher.php, line 200 Dispatcher::dispatch() - CORE/Cake/Routing/Dispatcher.php, line 167 [main] - APP/webroot/index.php, line 109
LAW: Explanation 1 to Section 32(1, the Income Tax Act, Explanation 1 to Section 32(1, Explanation 1, the Explanation 1 to Section 32(1, Explanation 1 to Section 32(1, the Explanation 1 to Section 32(1
ORG: P.D. Dinakaran, Tribunal, Tribunal, the Taxation Laws (Amendment and Miscellaneous Provisions, -(i, Court, Court, Court, Punjab National Bank, The Apex Court, L.H. Sugar Factory, Oil Mills, the State Housing Board, the Apex Court, Income Tax, Tribunal, M.P. No
NORP: J.1
DATE: years, 2001-02, 2002-03, 1986, 32, the 1st day of April, 2007
CARDINAL: 23.3.2004, 7.2.2005, 21.9.2005, 2.2, 1.4.1988, 4.1, 4.2, 1, 2003]1SCR634, 4.3, 2007)2SCC230, 1980]125ITR293(SC, 1996]219ITR521(SC, 4.6, 1
PRODUCT: Explanation 1 of Section 32(1
GPE: Nasiruddin
PERSON: Sita Ram Agarwal, Raghunath Rai Bareja v., Sugar Mill, Bombay Dyeing
ORDINAL: first