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2019 (3) TMI 1945 - AT - Income TaxDisallowance of business expenses and depreciation and interest - HELD THAT:- We find every force in the observation of the learned CIT(A) that till such time the company has to maintain its status as company and also has to be discharged certain legal obligations for which it requires the support of the clerical staff and the secretary or the accountant, as the case may be, and also to incur certain incidental expenses in that pursuit. It is, therefore, clear that when the possibility of the revival of the business activities or operation of the assessee are not ruled out once for all, it cannot be said that the assessee company had closed down its operations permanently so as to disallow the business expenditure. The temporary lull in the business during the lean period of transaction cannot be mistaken to be the permanent close down of the business. The clear indication is that the assessee has to maintain its status as company till the end comes and it has to perform certain legal obligations by incurring certain expenditure and more particularly to pursue the litigation as a result of which it has to receive ₹ 460 crores approximately which shall form part of the income of the assessee in the year in which it will be received. While recording the fact that no manufacturing activity had taken place by the assessee during the year, learned CIT(A) disallowed the depreciation on plant and machinery but he rightly thought it fit to allow depreciation on furniture and building. We endorse the same view so also CIT(A) rightly deleted the addition of ₹ 3384/- by recording a fact that during the year the assessee had not received any amount by way of income-tax refund. We are of the considered opinion that the impugned order does not suffer any illegality or irregularity and on the other hand, the appeal of the revenue is devoid of merit.
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