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M/s Karnavati Export Pvt. Ltd. Versus Income-tax Officer, Ward-4 (2) , Ahmedabad

2016 (3) TMI 239 - ITAT AHMEDABAD

Set off of business loss against interest income taxable under the head income from other sources - non existence of business activity - Held that:- As assessee has accepted that no business activity has been carried out during the year under appeal and the expenditure claimed in the profit and loss account was a write off of asset which was standing in the books of account. Such write off could have been allowed only if there had been a business activity running during the year. We, therefore, .....

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Mr. Lala Philips, Sr.DR ORDER PER Manish Borad, Accountant Member. This is an appeal filed by the assessee against the order of CIT(A)-VIII, Ahmedabad, dated 27.7.2013, in appeal No.CIT(A)- VIII/ITO/Wd-4(2)/43/12-13 for Asst. Year 2008-09. Assessment was framed u/s 143(3) of the I.T. Act, 1961 (in short the Act) on 25/6/2010 by ITO Ward-4(2), Ahmedabad. 2. Following grounds have been raised in this appeal :- 1. That on the facts and in law or in the circumstances of the case, the ld. CIT has err .....

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cessation of the activity due to adverse conditions cannot be considered as cessation of the business. 4. That the ld. CIT wrongly presumed that these licenses have not been included as income in earlier years. 5. That the ld. CIT has not considered the evidences produced before him in regards of inclusion of these licenses in previous year income. 6. That on the facts and circumstances of the case, the ld. CIT erred in sustaining the same assessment as passed by the ld. AO. As such the assessme .....

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s issued on 25.8.2009 and duly served upon the assessee on 27.8.2009. During the course of assessment proceedings on verification of profit and loss account it was observed by the Assessing Officer that assessee has stopped its business activities of exporting dyes and chemicals during financial year 2006- 07 and no business activities were carried out during the year under appeal i.e. Asst. Year 2008-09 relevant to F.Y. 2007-08. However, the assessee has claimed custom duty expenses in relation .....

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peal before CIT(A) who confirmed the addition made by Assessing Officer by observing as under :- 3.3 Decision I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. The appellant had claimed deduction from income on account of utilized duty payment benefit which was received through advance license DEPB license and DFRC license. It was claimed by the appellant that since the business was closed it could not use the benefit and therefo .....

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siness has been closed and no income from the business from which these incentives were earned has been shown. The appellant has not demonstrated as to how these incentives which are now proposed to be written off, were included in the income of earlier years. Moreover the interest income has been taxed by the AO as income from other sources and there is no relation of the entitlement with the income from other sources, it cannot be said that this expenditure has been incurred for earning the in .....

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before the lower authorities that it has stopped its business activities during Financial Year 2006-07 and the unutilized import license which has lapsed due to lapse of date of validity and the same has been written off in the profit and loss account and this write off of expenditure of ₹ 2,92,510/- has been claimed for set off against income from other sources and the lower authorities have rightly disallowed the claim of set off and, therefore, the appeal of assessee should be dismisse .....

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business during the year and incurs losses during the year from the business then as per provisions of section 71 of the Act such business loss can be set off against income from any other head except income from capital gains. From perusal of assessment order we find that assessee has submitted following before the assessing authority during the assessment proceedings :- From F.Y. 2006-07 assessee company stop its business activity of exporting dyes and chemicals due to ups and down in the mark .....

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