Tribunal held that the assessee had entered into an agreement with various parties for the purchase of leasehold lands at various places, which were to be used for its business operations, for establishing retail outlets, liquid petroleum gas bottling plants and refineries. The leasehold premium amortised by the assessee was in the nature of compensation paid to the landlords, in addition to the rent. Since the leasehold premium amortised by the assessee was in the nature of rent, it was to be allowed as a revenue expenditure in the hands of the asseessee. (AY. 2006-07 , 2007-08)
Bharat Petroleum Corporation Ltd. v. ACIT (OSD) (2018) 63 ITR 244 (Mum.)(Trib.)
S. 37(1) : Business expenditure – Capital or revenue –Amortization of premium paid on leasehold land – Premium in nature of rent – Allowable as revenue expenditure.