Civil and electrical works on leasehold premises- Reebok Store- Held deductible from income no matter the quantum of expense

In Emdee Apparels v. Asstt. CIT (2012) 19ITR (Trib) 623 the assessee set up a new showroom and incurred certain one-time costs on branding involving civil and electrical expense. As he claimed the same as revenue the AO held it as an expenditure of enduring nature. He further allowed 10% depreciation.

The Bangalore bench examined the lease and found out a termination clause in the agreement for which reason it held that the lease cannot be considered as permanent/perpetual or for that matter yielding any benefit of enduring nature. The entire expense was thus held deductible in the year in which the same is incurred.