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2015 (9) TMI 335 - HC - Income TaxClaim of business loss rejected - loss comprised of deposit relatable to dealership/distributorship and the balance referable to cylinder hire charges due to fraud/cheating on him - business loss v/s capital loss - Held that:- Admittedly, the assessee had not commenced its distributorship business. The deposits made by the assessee was for the purpose of acquiring profit and securing dealership/distributorship. Originally, the assessee was in the business of manufacturing handloom silk and not in the business of LPG distributorship. Hence, the purpose of entering into such a new business must be considered to be for the purpose of securing an enduring benefit of a capital nature and hence, the deposit made in that regard cannot be treated as expenditure in the course of carrying on the existing business. The deposit was made by the assessee pursuant to an agreement between the parties for getting dealership/distributorship of LPG. Hence, the deposit made by the assessee was for the purpose of acquiring a profit-making asset to carry on business in LPG. Therefore, the said deposit made should not be treated as revenue in nature and the loss thereof must not be treated as business loss. The loss thereof was a loss suffered on the capital account and could not be deducted on the basis that it was a business loss. See Hasimara Industries Ltd. v. Commissioner of Income Tax and another reported in [1997 (9) TMI 5 - SUPREME Court]. - Decided against the assessee
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