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TMI Blog2014 (9) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... ull, in the business, having regard to the circumstances of the case - the plant & machinery, factory premises, etc. were used in the preceding years for the purpose of business and even in the years under consideration they were ready for use and in the language of section 32 of the Act, the assets have been said to be put to use in the form of passive use in which event the assessee is entitled to claim depreciation - CIT(A) has taken into consideration the overall circumstances of the case while granting relief with regard to depreciation, telephone expenses, professional charges, etc. –the order of the CIT(A) is upheld – Decided against revenue. - ITA No. 6252 & 6253/Mum/2010 - - - Dated:- 6-3-2013 - Shri D. Manmohan And Shri N. K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take place during the assessment years under consideration the assessee had to incur certain expenditure necessary for the purpose of sustaining the company and also for making efforts to revive its business. In this regard the assessee claimed deduction towards travelling expenses, professional charges, conveyance expenses, Telephone expenses and depreciation in respect of previous years relevant to the assessment years. 4. The AO disallowed the claim of the assessee mainly on the ground that the assessee was not carrying on any business activity and hence the expenditure cannot be treated a revenue in nature. He also stated that the expenditure is not obviously for protecting the business of the assessee company. The existence and surv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose. Assessee challenged the orders passed by the Assessing Officer contending, inter alia, that travelling expenditure was incurred in attending various court matters at Ahmedabad, Surat and BIFR matter in Delhi with the main intention to continue the activity of manufacture under the specific terms to enable it to revive the operations. It was also contended that the Directors and employees as well as the professionals were not engaged in any personal activities; the expenditure incurred by them was to ensure the existence and survival of the company. Therefore, merely because, pending clearance from BIFR, activity could not be carried on, it should not be assumed that business was closed down. 7. The learned CIT(A) accepted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the sanctioned scheme of BIFR there was no production activity in the years under consideration and the company s manufacturing activity came to a stand still. Assessee admitted that on account of recession in steel industry the business could not be run. Even as per the operational restructuring sanctioned the intention was to continue only the Aurangabad unit by demerging and segregating the Mumbai Unit into a separate operational activity and it cannot be stated that there is any intention to revive the Mumbai Unit. Under these circumstances the expenditure incurred by the assessee as well as the depreciation claimed were correctly not allowed by the AO. 9. On the other hand, the learned counsel for the assessee adverted our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. It is not in dispute that in the previous years relevant to the assessment years under consideration the assessee company had made bonafide efforts to revive its business and having recognised the seriousness of the Directors to revive its activities, the BIFR sanctioned the rehabilitation scheme and soon thereafter the assessee company commenced its activities and in fact achieved substantial turnover in the subsequent years, which would highlight that the assessee never intended to windup its activity. In other words, in the years under consideration there was only a temporary lull, in the business, having regard to the circumstances of the case. It is also not in dispute that the plant machinery, factory premises, etc. were used in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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