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2019 (2) TMI 986 - AT - Income TaxDiscontinuation of Business activity - temporary suspension and/or lull in the business of the assessee - disallowance of Expenditure claimed as deduction u/s 37(1) and the depreciation claimed u/s 32 - Held that:- As evident from the documents placed on record including submissions made by the assessee that there was temporary lull in the business of the assessee and it was not a complete cessation of business activity fact of which was not considered by the authorities below in its proper prospective. AO disallowed the expenses incurred by the assessee for discontinuation of its business which deserves to be allowed; in fact the profit and loss of the subsequent years shows that there were considerable materials consumed by the assessee company in the said trading of cotton business. The gross receipt of the assessee became high during the subsequent years which establishes the fact of there being temporary lull in the business activity of the assessee during the year under consideration.The reason which was shown by the assessee while replying the show-cause issued by the AO for such lull in the business seems to be justified which was again not attended by the Learned CIT(A). There was a temporary suspension and/or lull in the business of the assessee and thus the assessee is entitled to the claim of deduction u/s 37(1) of the Act, which was incurred by the assessee as narrated herein before as also the depreciation u/s 32 of the Act. - Decided in favour of assessee.
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