TMI Blog2012 (7) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... ess activity” - the revenue authorities were incorrect in disallowing the claim of expenses and depreciation - decided in favour of assessee. - I.T.A.NO.4537/Mum/2010 - - - Dated:- 30-5-2012 - SHRI R.S.SYAL, SHRI VIVEK VARMA, JJ. Appellant by : Ms. Sonali Godbole. Respondent by : Mr. Aatiq Ahmed. O R D E R Per VIVEK VARMA, JM : The appeal arises out of order of CIT(A) 22, Mumbai dated 18- 11-2009. 2. The appeal was filed by the assessee on 02-06-2010, which according to the registry and defect notice, was delayed by 127 days. 3. At the time of hearing, the Authorised Representative pointed out that a letter dated 06-07-2010 along with an Affidavit was filed praying for the condonation of delay and giving ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee along with manufacturing activity and sales had been carried on since assessment year 2000-01, though, during the year under consideration, the manufacturing activity was being carried out through the reputed subcontractors. The AO, disagreeing with the submissions of the assessee held that computation of income is to be done based on matching concept of income and expenditure. During the year the assessee has income from dividend and investments and there is no provision in the I.T. Act to allow expenses against capital gains. He, therefore, set off the expenses against the dividend income. 7. Aggrieved, the assessee approved the CIT(A), who observed that since there was no manufacturing activity during the year by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es during the year under consideration, but there was business activity. The A.R. placed reliance on the following decisions: a) Inderchand Hari Ram Vs CIT, reported in 23 ITR 437 (All) b) L.VE. Vairavan Chettiar vs CIT, reported in 72 ITR 114 (Mad) Closing the arguments, the A.R. prayed that the assessee had validly claimed expenses at Rs. 15,25,131/- and depreciation at Rs. 2,23,674/- (as per computation of income. Depreciation claimed at Rs. 4,10,972/- is as per books). 10. On the other hand, D.R. relies on the orders and prays that where there is no stock movement as well, then there cannot be any business. He, therefore, prayed to sustain the addition made by the revenue authorities. 11. We have heard both the parties and hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong intervals of inactivity and a concern may still be a going concern though it may for some time be quiet and dormant. Held, that the disallowance of the amount of loss claimed by the assessee to have been incurred in his arecanut business during the year of account relevant to the assessment year was not valid in law. As the assessee was maintaining the establishment and was waiting for improved market conditions in arecanuts and there was nothing to show that he completely abandoned or closed the business for ever, the business must be deemed to be continuing . In the other decision, cited by the A.R. we find that the expenses had been disallowed on the basis of the fact that there was no business activity. Here in the case at hand, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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