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2013 (2) TMI 818 - ITAT KOLKATACompensation loss on non lifting of materials of as speculative loss - Held that:- It is a situation in which there could not have been any possibility of actual delivery of the goods because even at the point of time when delivery was to take place, the factory was not even likely to come back to the possession of the assessee. The factory was given on lease and as such the purchases cannot be said to have been made for bonafide actual user purposes. CIT(Appeals) has painstakingly analyzed the various contract provision - namely clause 7 to 9, these clauses have inbuilt speculation element embedded in the agreement. The factum of actual non delivery or impact of non delivery could be relevant only in the cases in which genuine business transactions are involved. On the facts of the present cases, these aspects are not really relevant. In view of these discussions, as also bearing in mind entirety of the case, we approve the conclusions arrived at by the CIT(Appeals) and decline to interfere in the matter. Nature of expenditure - loss on cancellation of booking of 100 TPD Klin, proposed expansion of steel unit - Held that:- We find that in the case of CIT-vs.- Anjani Kumar Co. Ltd. (2002 (7) TMI 44 - RAJASTHAN HIGH COURT) was in seisin of a situation in which advance was paid to acquire land for expansion of business but since land was not acquired, no capital asset came into existence and there was no question of allowing depreciation on the said asset. On these facts, Their Lordships upheld the view that since no land was acquired and no capital asset came into existence, the loss of advance was to be allowed as business loss. In this view of the matter, and having noted that the loss was incurred in connection with expansion of existing business, we are of the considered view that loss of advance has to be allowed as a revenue deduction of business loss. The question of expense being capital in nature would have arisen only if the machinery was actually acquired; that is not the case here.
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