TMI Blog2019 (6) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure, during the year under consideration deduction whereof ought to have been allowed u/s. 24. In that view of the matter the expenditure claimed by the assessee company of ₹ 8,75,403/- as business loss is hereby allowed. The addition on this ground as made by the authorities below is thus deleted. - Assessee s appeal is allowed. - ITA No. 1509/Ahd/2014 - - - Dated:- 24-4-2019 - Shri Pramod Kumar, Hon blevice President And Smt. Madhumita Roy, Judicial Member For the Assessee : Shri S. N. Divatia, AR For the Revenue : Shri James Kurien, Sr. DR ORDER PER MADHUMITA ROY- JM : The instant appeal filed by the assessee is against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed expenses totalling to ₹ 6,83,735/-. Further deduction of depreciation on law 1,91,668/- u/s. 32 of the Act totalling to ₹ 8,75,403/- as additional expenses has been claimed by the assessee. A show-cause dated 19.11.2012 was served upon the assessee pursuant to which the assessee submitted before the Ld. AO that it has not claimed any expenditure against rent income neither depreciation on the said business property. It was further narrated by the appellant that it has incurred certain fixed expenditure to maintain its existence and run business operations and therefore has set off thus minimum bare expenses as business expenses. It was further pointed out that the rental income from the building has been separately asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. He also relied upon the judgment passed by the Hon ble Tribunal, Delhi in the matter of Income Tax Appeal vs. Mukul Finance Pvt. Ltd. reported in [2009] 29 SOT 11 (Delhi), the judgment passed by the Hon ble Calcutta High Court in the matter of Mukti Properties Pvt. Ltd. vs. CIT (2011) 50 DTR 273 238 CTR 174 (Cal) (High Court), CIT vs. New India Industries Ltd. (1993) 201 ITR 208 (Gujarat HC) in support of his claim. On the contrary the Ld. DR relied upon the order passed by the authorities below. 4. Heard the rival contentions made by the respective parties and perused the relevant materials available on record. We have carefully considered the order passed by the Ld. Delhi Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business not being functional in the relevant previous year. In our opinion, not carrying on business activity in a particular period cannot be equate with closure of business as it takes an unsustainably narrow view of the scope of cessation of a business. In the case of LVE.VairavanChettiar. Vs. CIT [1969] 72 WR 114, their Lordships of Hon'ble Madras High Court were in seisin of a situation where the assessee had obtained an import licence for doing arecanut business but due to adverse conditions in market, he temporarily suspended the arecanut business for the assessment year in question. Nevertheless, he was maintaining the establishment and was waiting for improved market conditions in arecanut. It was thus an admitted position th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up in the ITR head notes at p. 115 of the report, as the assessee was maintaining the establishment and waiting for the improved market conditions in arecanuts and there was nothing to show that he completely abandoned or closed the business forever, the business must be deemed to be continuing . In the light of this legal position, it would follow that unless there issome material on record to show that the assessee has completely abandoned the share dealing business, merely because there are no business transactions in the relevant previous year cannot bereason enoughto come to the conclusion the business has come to an end. It could not thus be said; as was the case before the Hon'bleMadras High Court, that the assessee had comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t advantage and he may do so either by using it himself personally or by letting it out to somebody else. Similarly in case of your appellant, assets let out are commercial and are capable of being used as commercial asset. Therefore, rent received from the said commercial property may be treated as business income and depreciation may be allowed to your appellant. 6. Having heard the Ld. Counsel appearing for the parties having regard to the facts and circumstances of the case and particularly the judgment cited above we are of the considered opinion that there is no complete cessession of business of the assessee and in order to maintain the establishment the assessee has incurred expenditure which has been c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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