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TMI Blog2016 (3) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... ner that the assessee did not carry on business during the year under consideration, then it follows as a corollary that the assessee could not have claimed expenses under the heading 'business expenditure'. The error committed by the Assessing Officer in allowing business expenditure, was clearly an error of law, which satisfied the first condition. This error of law consequently became prejudicial to the interests of the Revenue, as seen from the computation made by the Deputy Commissioner in the proceedings for giving effect to the order of the Commissioner. In such circumstances, the first question of law on the scope of Section 263 has to be answered against the appellant/assessee. - Tax Case Appeal No. 1383 of 2007 - - - Dated:- 17-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed depreciation on that portion of the building. 5. In the return for the assessment year 2001-02, the appellant claimed a business loss of ₹ 1,27,95,073/-, setting it off with the income from house property thereby claiming a net loss of ₹ 37,31,967/-. The appellant also claimed refund of the entire tax deducted at source on the ground that no tax was payable during the relevant year. 6. The Assessing Officer completed the assessment under Section 143(3), disallowing a portion of the depreciation on building, furniture and plant and machinery, claim of bad debts, etc., and assessed the total loss at ₹ 9.41 lakhs as against the returned loss of ₹ 37.31 lakhs. The order was appealed against. 7. During the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Assessing Officer that the assessee did not carry on business during the year under consideration. 10. Once, on facts, it is found by the Assessing Officer and by the Commissioner that the assessee did not carry on business during the year under consideration, then it follows as a corollary that the assessee could not have claimed expenses under the heading 'business expenditure'. The error committed by the Assessing Officer in allowing business expenditure, was clearly an error of law, which satisfied the first condition. This error of law consequently became prejudicial to the interests of the Revenue, as seen from the computation made by the Deputy Commissioner in the proceedings for giving effect to the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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