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2019 (7) TMI 988 - HC - Income TaxBenefit of set off of business losses against its other income - income from renting of warehousing - in Assessment Years 1999-00, 2000-01 and 2002-03 the assessee company's assets such as machinery, vehicles, trucks, furniture and fittings, factory sheds were maintained with the hope of getting orders - HELD THAT:- In the decision in the case of L.VE.Vairavan Chettiar [1965 (4) TMI 6 - MADRAS HIGH COURT] the Court found that there was nothing to show that the business had been abandoned and the assessee was continued to incur expenditure and it would come up and the business would be successful. In the said factual background, the Court held that the resultant loss being business loss is deductible. The three fact finding authorities have held that the entire business activity have come to a grounding halt. Subsequently, the conduct of the assessee also clearly reveals that the same line of business was never restarted. Therefore, we agree with the view expressed by the Tribunal that the assessee is not entitled for the benefit of set off of business loss which is in fact, business expenditure against the other income for all the three assessment years under consideration. In Kisan Sahkari Chini Mills. Ltd. [2004 (11) TMI 77 - ALLAHABAD HIGH COURT] it has been held that Section 57 provides for deductions which are admissible from the income taxable under the head “income from other sources”. If a particular expenditure falls strictly under the sub-clause of Section 57 only then it is liable to be allowed as expenses otherwise not. It was further held that expenditure incurred on maintenance of the office and for planning of construction does not fall under any of the sub-clauses of Section 57 and therefore, the assessee could not have allowed the expenses as deduction from the interest income. Sub-Clause (ii) of Section 56(1) speaks of income from machinery, plant or furniture belonging to the assessee. Admittedly, no such income was generated and therefore, the claim of expenditure to be a business loss and to be set off against the income from house property is a plea which has to be necessarily rejected. Appeal stands dismissed and the substantial question of law is answered against the assessee.
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