TMI Blog2015 (9) TMI 1448X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitration. Find that the assessee has a regular establishment and incurred various expenses as a part of running business clearly establish that business has neither being closed or discontinued by the assessee. It is an established legal position that merely on the ground that there is no business receipt during the year, there cannot be any presumption about closure of the business. Neither the AO nor the Ld. CIT(A) has appreciated the facts and evidence filed by the Assessee before needs to be considered by the AO. In the interest of justice, we remit back the issues in dispute to the file of the AO with the directions to consider the written submission filed by the assessee before the Ld. CIT(A) and decide the case afresh, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of the claim, orders of the lower authorities in rejecting the claim are without any legal and factual basis. (ii) That all the claim of expenses are relating to year under reference and claim being in accordance with mercantile system of accounting, there is no ground or basis for disallowance of same. (iii) That the AO has even disallowed the expenses which are of statutory and incidental nature. 3(i) That on the facts and circumstances of the case, the AO was not justified in considering interest income which is incidental to the business activities as income from other sources as against the claim of the assessee that same is part of business and assessable under the head business. (ii) That the interest being o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the order of the Ld. CIT(A). 5. I have heard both the parties and perused the records, especially the order of the Ld. CIT(A). For the sake of convenience, I am reproducing the hereunder the findings of the Ld. CIT(A):- 1.1 I have considered the grounds raised in appeal and, the facts of the case. I have also considered the submission filed by the AR of the appellant. 1.2 The Assessing Officer has disallowed the expenses and depreciation totalling to ₹ 68,79,508/- and added to the income of the assessee. The assessee has not shown any receipt from its business of purchase and sale of state lottery tickets being sole distributors of lotteries of Nagaland and Meghalaya state. The assessee has simultaneously claimed expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s has been resumed. The assessee itself has submitted .a letter dated 20.11.2008, a reference of which has been made in the order of assessment, from the lotteries, branch of Finance Department of the Government of Nagaland makes it abundantly dear that no such business has resumed. Rather the fact remains that the assessee has not transacted any business during the year and in subsequent years. In view of this, the claim of expenses, administrative as well as depreciation is liable to be disallowed. Further, the interest received from bank is liable to be considered as income from other sources instead of the claim as business income. The Assessing Officer has correctly placed reliance on the decision of Hon'ble Delhi High Court report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the record that the assessee is engaged in the business of lotteries and the business has never been closed or discontinued, as stated by the Ld. Counsel of the assessee. The firm is still in existence and maintaining regular establishment and infrastructure. The lottery business is being carried out on in terms of agreement with Nagaland and Meghalaya Authorities. However, the business was discontinued by these authorities on the technical reasons and dispute which is still pending in arbitration. I find that the assessee has a regular establishment and incurred various expenses as a part of running business clearly establish that business has neither being closed or discontinued by the assessee. In my view it is an established legal po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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