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2017 (11) TMI 903 - AT - Income TaxDisallowance for the business expenses including the depreciation - assessee has not carried out any activity under the head “business or profession during the year under consideration as well as subsequent year - Held that:- It is the disputed fact that no income whatsoever has been shown by the assessee in the financial year which beginning from 2003-04 to 2005-06 and 2008-09 as evident from the order of Authorities Below. It is also disputed fact that assessee has shown various advances in its balance-sheet for the purchase of property as evident from the order of Authorities Below. But the disallowances were made by AO on the ground that there is no business activity carried out by assessee. In our considered view it is a question of fact to establish whether the business of assessee is in existence or not. If yes it is very much eligible for deduction of the expense incurred by assessee. We note that the ld. CIT-A has simply accepted on the submission of the assessee and has come to the conclusion that the assessee is doing business activity. But no contrary evidence has been brought on record to prove the existence of business of assessee in the appellate order except a finding that assessee has made advance for the purchase of property. In our considered view, the advance shown by assessee does not ipso facto prove that assessee is carrying on business. Thus in our considered view the fact that the assessee is running a business needs to be established. Therefore we are inclined to set aside the impugned order and restore the issue back to the file of Ld. CIT(A) with a direction to find out the question of fact as to whether the business of assessee is in existence or not. While doing so, the Ld. CIT(A) shall give a due and fair opportunity of hearing to the assessee as well as call for the remand report from the AO in accordance with law and shall decide the matter by way of a speaking order in accordance with law. Hence, this ground of Revenue’s appeal is allowed for statistical purpose.
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