TMI Blog2009 (1) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Delhi-XI under section 260A of the Income-tax Act, 1961 ( IT Act for short), for the assessment years 1999-2000, 2000-01 and 2001-02. With regard to the assessee s claim for expenses for assessment year 1999-2000, 75 per cent thereof had been disallowed primarily on the ground that although the assessee was doing export business up to the year 1998, business had closed down in the three subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the business had been closed down and that the sale of PPQ was very much a business activity. Similarly, selling of stock could not lead to this inference. The ITAT has also noted that the expenditure in these years has substantially reduced since there was a lull in the business. Rather than a closure of business, the ITAT was of the opinion that it was a case of dormancy of business acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pn. Ltd. [2000] 243 ITR 5291 (Mad.) where it has been pithily noted that maintenance and establish- ment is the indication of intention to resume business. In Karsondas Ranchhoddass v. CIT [1972] 83 ITR 1 (Bom.) it was noted that there were two periods of activity before and after the interregnum or period of inactivity which was indicative that the business was nevertheless continued. We are in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also that the Department had allowed the expenditure in earlier years. The ITAT held that as long as assessee was carrying out her business from the said premises the expenses incurred cannot be disallowed merely because the assessee permitted Varma Industries to carry on the business from the said premises. We are in agreement with the ITAT that the additions made on this account had been correct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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