TMI Blog2019 (3) TMI 1945X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee company had closed down its operations permanently so as to disallow the business expenditure. The temporary lull in the business during the lean period of transaction cannot be mistaken to be the permanent close down of the business. The clear indication is that the assessee has to maintain its status as company till the end comes and it has to perform certain legal obligations by incurring certain expenditure and more particularly to pursue the litigation as a result of which it has to receive ₹ 460 crores approximately which shall form part of the income of the assessee in the year in which it will be received. While recording the fact that no manufacturing activity had taken place by the assessee during the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenses to the tune of ₹ 82,01,880/- and depreciation to the tune of ₹ 13,39,499/- and interest to the tune of ₹ 3384/-. 3. Assessee preferred an appeal before the learned CIT(A) and argued that in this matter there is only a lull in business but the assessed does not go out of business and the very fact that they are maintaining an establishment itself shows that they were waiting for an opportunity for resumption of business in future. It was further submitted that so long as the assessee company did not close down their business permanently, they have to maintain its status as company and discharge certain legal obligations and for such purpose, it is necessary to appoint clerk and secretary or accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of the assessee and deleted the disallowance made by the AO to the tune of ₹ 82,01,880/- towards the business expenses. 5. Learned CIT(A) further observed that in view of the admission of the assessee that there is no manufacturing activity taking place during the year, the depreciation on the plant and machinery has to be disallowed whereas depreciation on furniture and building has to be allowed so also because of fact that during the year under consideration, the assessee has not received any amount by way of income-tax refund, no income has been booked in the books of accounts and, therefore, the alleged addition of ₹ 3384/- should also be deleted. 6. Revenue is, therefore, before us in this appeal. It is ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, clear that when the possibility of the revival of the business activities or operation of the assessee are not ruled out once for all, it cannot be said that the assessee company had closed down its operations permanently so as to disallow the business expenditure. The temporary lull in the business during the lean period of transaction cannot be mistaken to be the permanent close down of the business. The clear indication is that the assessee has to maintain its status as company till the end comes and it has to perform certain legal obligations by incurring certain expenditure and more particularly to pursue the litigation as a result of which it has to receive ₹ 460 crores approximately which shall form part of the income of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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