Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 284 - AT - Income TaxDisallowance of expenditure including depreciation incurred and claimed by the appellant company - case of temporary suspension of business - finding of the learned Commissioner of Income Tax (Appeals) that on plot of land was leased overlooks the buildings constructed by the assessee and forming part of fixed assets declared in financial statement furnished alongwith return of income - Held that:- Apart from requiring the lessee to pay rent the lessee is furthered required to make payments towards electricity charges as per the meter reading and make any permanent construction and alterations. In the said plot as per its requirements the assessee as a lessor further expresses that it has no objections for inspection/verification of the bonded premises by the Central Excise and Customs officer at any time. Not only the fact that both the lessor and the lessee in regard to its Registered office function from the very same location. The lessor assessee being a Private Limited company and the lessee being a partnership firm also function from the very same premises as per the lease deed. In the peculiar facts and circumstances of the present case it is necessary to first address the facts which admittedly have not been properly addressed. Principally if the assessee is able to show that the expenditure claimed qua Ground no.1 pertains to it alone and not to the related concern and is incurred to keep its existence alive the expenditure on verification has to be allowed. However, if the assessee’s expenditure also includes the expenditure of the related concern then to that existent it has to be disallowed. Further the nature of work by related concern may also be an area for consideration as if the very same nature of work is done then it cannot be said to be a case of recession or lull in the business as then by conscious acts the assessee itself is parting with work in favour of a related concern. Nothing has been placed before us to show what is the nature of work entered into by the related concern i.e. the partnership firm to whom a plot of land has been leased. Thus the issues arising in Ground No.1, we deem it appropriate to restore to the AO giving liberty to the assessee to lead evidence if any in support of its claim. Qua Ground No.2, we find in the absence of any evidence to the contrary the clear recitals in the lease deed relied upon consistently by the tax authorities do not call for any variation in the conclusion arrived at.
|