9911796707
TMI Blog2009 (12) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... we have heard the matter finally at this stage itself. 4. The appellant/assessee is a private limited company and is engaged in the business of manufacturing and sale of tents, cotton textiles, jute, flex, wool, silk, ready-made garments etc. As per the object clause in the Memorandum of Association, one of the objects is to deal in securities, stocks, shares as well. 5. In the assessment year in question the assessee had no trading activity. However, according to the assessee it had incurred expenses of ₹ 14,38,099/-. Out of these an amount of ₹ 8,00,000/- on account of write off of bad debts relating to the tent business which was not claimed as expenditure by the assessee itself in the year income tax return filed. Bal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to deduction of the aforesaid expenditure as it could set off the same in terms of Section 71 of the Act. CIT (A) also did not go into this aspect specifically and rejected the appeal on the ground that there was no business activity and from this he jumped to the conclusion that there was no 'cessation of business'. Further, the appeal preferred by the assessee before the Income Tax Appellate Tribunal(ITAT) has met the same result. 7. After going through the impugned order passed by the ITAT, we observe that the contentions of the appellant are not appropriately dealt with by the Tribunal. There is no specific finding or observation of the Tribunal on the aspects highlighted by the appellant. In these circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial expediency would be applicable to Section 57 (iii) as well as it applies to Section 37(1) as held by Supreme Court in Eastern Investments Ltd. vs. Commissioner of Income-tax, 20 ITR 1. In case it is found that the business had only been suspended in that particular year and had not been closed down, then the aforesaid expenditure would be allowable as business expenditure. In such a case in the absence of any income under the head 'business income' it could be treated as business loss and the assessee was entitled to set off of this business loss against the income from other sources as provided under Section 71 of the Act. 10. Since such an exercise has not been done by the Assessing Officer or the other authorities, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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