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2016 (9) TMI 205 - AT - Income TaxDisallowance of interest payments and other general and administrative expenditure - disallowance as there is no business activity - Held that:- The factual matrix of the case supports the plea of the assessee that it is not a case of discontinuation or closure of business, but temporary lull in activity. During this period of lull or interregnum, the assessee is expected to continue maintenance of its business apparatus and for that purpose the expenses of general and administrative nature claimed by the assessee deserve to be allowed. In this context, we find that the ratio of the judgment of the Hon’ble Delhi High Court in the case of Anita Jain (2009 (1) TMI 774 - DELHI HIGH COURT ), which was relied upon by the assessee before us, supports the allowability of such expenditure. Therefore, on this count we allow the plea of the assessee. Insofar as the payment of interest is concerned, the dispute raised is similar to what was considered by the Tribunal in assessee’s own case for Assessment Year 1998-99. On this aspect, assessee had pointed out before the lower authorities that since the past investments have been made in stock-in-trade of shares and such investments were made out of funds available from Partners Capital and other loan funds, on such loan funds assessee had incurred interest expenditure which has been disallowed. In Assessment Year 1998-99 similar claim for deduction of interest expenditure was disallowed by the Assessing Officer, which was allowed by the Tribunal. Following the said precedent, in the present year also, such a claim of the assessee deserves to be allowed. In fact, in Assessment Year 2002-03, as also in Assessment Years 2007-08 and 2008-09, interest expenditure incurred by the assessee has been allowed. Therefore, considering the aforesaid precedents, we find no reason to deny assessee’s claim for deduction on account of interest expenditure in the instant year.
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