Tribunal held that in order to invoke the provisions of Explanation 1 to section 32(1) a finding has to be given first as to the nature of expenditure incurred by the assessee. If the nature of expenditure is capital in nature, then the provisions of Explanation 1 to section 32(1) shall apply. It was the case of the assessee that most of the expenditure incurred by it on leasehold premises were revenue in nature. The authorities had not examined the nature of expenditure incurred by the assessee. The assessee had furnished the various details of expenditure incurred by it on leasehold premises. Accordingly, this issue required fresh examination since the nature of expenditure incurred by the assessee had to be examined in order to apply the provisions of Explanation 1 to section 32(1) .( AY.2012-13, 2013-14)
Century Link Technologies India Pvt. Ltd. v Dy. CIT (2020) 78 ITR 71 (SN) ( Bang) (Trib)
S.37(1) : Business expenditure -Capital or revenue – Leasehold premises — Nature of expenditure to be examined before applying provision relating to ownership of asset [ S.32(1), Expln. 1. ]