Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 371 - AT - Income TaxDisallowance u/s 35AD being capital expenditure incurred for the purpose of specified business as per law - HELD THAT:- There being no material change in the facts and the applicable law as compared to the preceding years [2023 (7) TMI 1302 - ITAT KOLKATA] placing reliance on the decision in the case of Haryana Warehousing Corporation [2019 (7) TMI 1997 - ITAT CHANDIGARH] we follow the decision of the Coordinate Bench in assessee’s own case and thereby allow the claim of the assessee u/s.35AD - Accordingly, ground no. 1 taken by the assessee is allowed. Disallowance on account of loss of sale of assets which were not part of block of assets as the expansion of business by setting up of clinic was abandoned, assessee furnished the details of the loss claimed by the assessee placed in the paper book - HELD THAT:- The fact of abandoning the expansion of business by setting up of a clinic is not in dispute. Also, the incurrence of loss has not been controverted by bringing any material to this effect. AO has disallowed the claim of loss by holding it as capital in nature. It is also noted that the assessee has accounted the expenditure incurred by it as capital work in progress on which no depreciation had been claimed as these assets were never put to use. We note that it is the prerogative of assessee to conduct and plan its business considering economic viability and making of profits. It is the sole discretion of the assessee to make its business decisions for the conduct and the manner in which it wants to plan its business. The dynamics of business are variable and depend upon several factors and consideration, based on which assessee takes its business decision. In the present case before us, assessee found its expansion by setting up a clinic as economically not viable and in order to save its future loss has dropped and abandoned the said project. In order to mitigate the future loss, and to recoup maximum for the expenditure already incurred, the assets deployed on the expansion were put to sell, resulting in the loss which has been claimed by the assessee in computing its profit and loss from business. In view of the decision of Binani Cement Ltd. [2015 (3) TMI 849 - CALCUTTA HIGH COURT] and the undisputed facts as stated above, we are of the view that claim of assessee is justifiable and is accordingly allowed.
|