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2016 (8) TMI 210 - GUJARAT HIGH COURT

2016 (8) TMI 210 - GUJARAT HIGH COURT - TMI - Allowbility of expenditure - whether the old business had come to an end and the new business had not started? ? - Held that:- As looking to the facts on record and in view the fact that amendment in the Memorandum of Article was made, we are of the opinion that the company has utilized its property, which was available in the books of account, as also the company has tried to come out from the gross expenditure and another activity is carried out. H .....

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tarted after taking title from the Bank and payment was made after approval and new activity was started from the date when they have cleared all the dues and this fact is clearly established from the letter issued by the Bank dated April 16, 1987. Thus, the tribunal has committed an error and we accordingly answer this question in favour of assessee and against the revenue. - Disallowance of interest paid to the Directors - Held that:- We are of the opinion that the loan amount was taken by .....

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nt of interest as expenses under the Act. - TAX APPEAL NO. 17 of 2001 With TAX APPEAL NO. 19 of 2001 - Dated:- 1-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR SN SOPARKAR, ADVOCATE FOR THE OPPONENT : MR PRANAV G DESAI, ADVOCATE COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of these two appeals, the appellant has challenged the order passed by the ITAT in ITA No.18 and 19/Ahd/2000 for the assessment year 1994-95 and 1995-96 dated 28/04/2006, whereb .....

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ot entitled to claim of set off of carry forward of loss of the old business against the new business as the new business has not started. The A.O. while passing the assessment order made some additions and has not allowed interest and administrative expenses and also made addition on the ground of short term capital gain. 2.2 The appellant carried the matter before the CIT(A), who set aside the assessment with a direction to the AO to recompute the taxable income after finding out the income an .....

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hat the old business had come to an end and the new business had not started? 2. Whether on the facts and in the circumstances of the case, the Tribunal has substantially erred in law in holding that the carry forward of loss is not allowable to the appellant? 3. Whether on the facts and in the circumstances of the case, the Tribunal has substantially erred in law in holding that the carry forward of loss suffered thereof after November 7, 1990 was not allowable to the appellant as the business .....

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he assessee? 4. Learned Counsel for the appellant has taken us to the relevant extract from Commentry of Chaturvedi & Pithisaria and further contended that in view of the decision of the Hon ble Supreme Court in case of Commissioner of Income-Tax v. Bokaro Steel Ltd., [236 ITR 315] the accrual of income and principle of real income can replace. 4.1 Learned Counsel for the appellant has also taken this Court to the arrangement which has been arrived between the company and the Bank on 16/04/1 .....

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appellant has also taken us to the balancesheet of the company and contended that the company has taken loan only with a view to get title clear and therefore when the company was making loss, it was wiped out by utilizing the assets. Thereafter, the company have started the business of developing land and therefore the benefit is required to be granted to the company. He has further contended that after the title was clear, they have started to get all permission from the local authority and st .....

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accepted and once the company has closed its business, it cannot carry forward the loss and benefit, which are claimed and has rightly not been granted by the authorities. He has further contended that in view of the concurrent finding of the authorities below, this Court may not interfere with the same. 6. We have heard the learned Counsel appearing for the respective parties. 7. So far as the question No.1 paused for our consideration is concerned, looking to the facts on record and in view th .....

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ed. We, accordingly, answer the issue No.1 in favour of the assessee and against the Department. 8. So far as question No.2 is concerned of not allowing the appellant to carry forward of loss, we are of the opinion that on overall consideration of the fact it appears that the appellant has continued its business activity and therefore loss made in earlier activity can be permitted to be carried forward and the Tribunal has committed an error in not allowing the appellant to carry forward of loss .....

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