Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (2) TMI 647 - AT - Income TaxContinuity of Business activity – Allowability of Expenses – Held that:- The CIT(A) has well appreciated the facts - The CIT(A) has also given very sound reasons for not accepting the order of the Tribunal in assessee’s own case for A.Y. 2006-07 - CIT(A) held that the facts as existing in F.Y.2005-06 are different from the facts which are existing in the relevant F.Y. i.e. F.Y.2008-09 - The appellant has not incurred expenses on account of maintaining old business establishment - These expenses were incurred for a new line of business from which no income was earned by the appellant either during the relevant previous year or even in future years - When appellant has never earned any income from the activity on which expenses were incurred, the same cannot be allowed in case of appellant. It is not a case where there was a slowdown in the business - In F.Y.2004-05 appellant earned only “royalty income” - In subsequent years i.e. from F.Y.2005-06 till F.Y.2008-09 neither any regular business activity has been carried out by the appellant nor any business income is earned - The reason of slow down or lull in the business does not exist in the case of appellant and in any case such a reason cannot be a valid ground for several years - the appellant claimed to have sold its entire manufacturing business to one of its related concern named Sigma Laboratories Ltd. on w.e.f. 01-04- 2009 - The expenses have been claimed by the appellant for F.Y.2008-09 and immediately thereafter the entire business was transferred by the appellant to its related concern - This means that the business was closed immediately after the relevant previous year as far as the case of the appellant is concerned - Relying upon M.M. Ipoh V. CIT [1967 (7) TMI 8 - SUPREME Court] that facts of each year are only important in order to decide the income of that year – thus, there is no reason to interfere with the findings of the CIT(A) – Decided against Assessee.
|