TMI Blog2016 (8) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... iture to the tune of ₹ 17,94,594/- on account of interest, finance, depreciation, rate and taxes and audit fees whereas denied the administrative and general expenses and depreciation which has been allowed by the CIT(A). The said expenses are in the nature of preserved and protected the assets of the company and according to the section 37 of the Act the expenses incurred to preservation and protected the assets of the company are liable to be deducted. See CIT Vs. Malayalam Plantations Limited (1964 (4) TMI 9 - SUPREME Court ) Therefore, in view of the said circumstances we are of the view that the CIT(A) has passed the order judiciously and correctly which does not require to be interfere with at this appellate stage - Decided ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lities merely because the liabilities are outstanding for a long period of time and the action of the CIT(A) in confirming the addition was based on surmises and conjectures. 3. For that on the facts and in the circumstances of the case the addition of ₹ 1,83,848/- u/s. 41(1) of the Income Tax act, 1961 is liable to be deleted. 3. The revenue has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the disallowance of ₹ 38,30,671/- without appreciating the fact that there is no business activity since 1997 and the expenses which had been allowed as deduction on account of fixed expenditure required for survival of the company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee in the previous year. The representative of the assessee has argued that the amount in question stood as liability in the books of accounts which has not been written off and at this stage it could not be said that the same has been seized or exist therefore addition u/s.41(1) of the Act is not required to be made. In support of this contention the assessee placed reliance on the Income Tax Officer Vs. Aasia Business Venture (P.) Ltd. [2014] 41 taxmann.com 84 (Mumbai-Tribunal and DCIT Vs. Allied Leather Finishers (P.) Ltd. [2009] 32 SOT 549 (Lukh.) and ITO Vs. Shri Dhanjay M. Pandey ITA No.4320/M/10 and ITO Vs. Bhavesh Prints (P.) Ltd. [2011] (12 taxmann.com 46) and CIT Vs. Jain Exports (P.) Ltd. [2013] 35 taxmann.com 540 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of remission or cessation thereof, the amount obtained by the successor in business or the value of benefit accruing to the successor in business shall be deemed to be profits and gains of the business or profession, and accordingly chargeable to income-tax as the income of that previous year. [Explanation 1. For the purposes of this sub-section, the expression loss or expenditure or some benefit in respect of any such trading liability by way of remission or cessation thereof shall include the remission or cessation of any liability by a unilateral act by the first mentioned person under clause (a) or the successor in business under clause (b) of that sub-section by way of writing off such liability in his accounts. 5.1 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pandey ITA No.4320/M/10 and ITO Vs. Bhavesh Prints (P.) Ltd. [2011] (12 taxmann.com 46) and CIT Vs. Jain Exports (P.) Ltd. [2013] 35 taxmann.com 540 (Delhi HC) and CIT Vs. Nitin S. Garg [2012] 22 taxmann.com 59 (Guj)(HC) and ITO Vs. Maharashtra State Co-operative, Consumers Federation Ltd. [2011] 13 taxman etc.. We are of the view that the said amount is not required to be added to the income of assessee u/s.41(1) of the Act. Therefore, these issues are decided in favour of the assessee against the revenue. I.T.A. 4056/MUM/2012(Revenue s Appeal):- 6. Under this issue the revenue has contested the disallowance of ₹ 38,30,671/-. The assessee claimed the expenditure to the tune of ₹ 56,25,245/-. The Assessing Officer wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of preserved and protected the assets of the company and according to the section 37 of the Act the expenses incurred to preservation and protected the assets of the company are liable to be deducted. In support of this contention we also found support of CIT Vs. Malayalam Plantations Limited (1964) 53 ITR 140(SC) and CIT Vs. Birla Cotton Spinning Weaving Mills Ltd. (1971) 82 ITR 166 (SC) and CIT Vs. R.B.Bansilal Abirchand Firm (1971) 79 ITR 104 (Bom HC( and Hindustan Chemical Works Limited Vs. CIT (1980) 124 ITR 561 (Bom. HC) etc. Therefore, in view of the said circumstances we are of the view that the CIT(A) has passed the order judiciously and correctly which does not require to be interfere with at this appellate stage. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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