a)The assessee, a lyricist, did his professional work from two premises occupied by him in a building for professional and residential purposes. Assessee offered replacement of old lift with new one on the condition that lift would belong to society and would be used by all members. Assessee claimed expenditure on installation of lift as an allowable expenditure under section 37(1).
b)The Assessing Officer did not accept the claim of the assessee. On appeal, the CIT(A) was of the view that the installation of lift was a capital expenditure. Since the lift was installed both for personal and professional purposes, the CIT(A) held that 50% of expenditure was of capital nature and depreciable.
On appeal, the Tribunal held as under:
1)It was apparent from the facts that the assessee had incurred expenses for replacement of the lift due to compelling circumstances as he was facing inconvenience and hardship on his professional front as well as in his private life due to frequent break down of the old lift in the building.
2)Thus, it was clear that the advantage of the new lift was not restricted exclusively to the professional activity of the assessee but assessee as well as his family members also enjoyed such facility.
3)Though other residents of the buildings were also using the lift, yet, for considering the allowability of expenditure the use of lift by other residents in the building was not relevant. The assessee had incurred the expenditure keeping in view his professional and family requirements.
4)For allowing the expenditure under section 37, the mandatory condition is that the expenditure has to be laid out wholly and exclusively for the purpose of business or profession, however, it should not be on the capital field.
5)Since the assessee did not acquire any advantage on the capital account or any new asset for its professional purpose and the lift was not an apparatus for generating the professional income, it could not be considered as an expenditure of capital nature.
6)The assessee had incurred expenditure in the compelling circumstances for removing the inconvenience and hardship faced by him in his professional work as well as non-professional life. The said expenditure had been incurred so that professional activity of assessee would be carried out more efficiently and profitably.
7)Thus, 50% of the total expenditure was to be considered to be for the professional purposes and was to be allowed as revenue expenditure. – JAVED AKHTAR V. ACIT  46 taxmann.com 395 (Mumbai - Trib.)