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TMI Blog2019 (3) TMI 1945X X X X Extracts X X X X X X X X Extracts X X X X ..... ntially the same, for the sake of convenience, we pass a common order. ITA No. 1837/Del/2016: 2. Assessee is a company. For the Asstt. Year 2011-12, they have filed the return of income on 30.3.2013 declaring a loss of Rs. 42,92,478/-. Learned AO found that no significant business activity was carried out by the assessee during this year and, therefore, disallowed the business expenses to the tune of Rs. 82,01,880/- and depreciation to the tune of Rs. 13,39,499/- and interest to the tune of Rs. 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 sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A) drew an inference that the very fact of the assessee company continuing to maintain an establishment is the indication of its intention to resume business but till such time it was necessary for them to maintain the status of a company for which certain administrative expenses have to be made. Learned CIT(A), therefore, accepted the contention of the assessee and deleted the disallowance made by the AO to the tune of Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) that till such time the company has to maintain its status as company and also has to be discharged certain legal obligations for which it requires the support of the clerical staff and the secretary or the accountant, as the case may be, and also to incur certain incidental expenses in that pursuit. It is, therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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