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TMI Blog2017 (3) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... essee and since the Ld. DR, has not raised any objection in this regard, I set aside this issue to the file of the AO for the limited purpose of giving the assessee an opportunity to support and substantiate its case for deduction of the impugned expenses u/s 57 (iii). FBT expenses assessed - allowance of expenses - Held that:- Expenses cannot be allowed as deduction merely on the basis that FBT has been paid by the assessee on the said expenses especially when there is no income earned by the assessee under the head “income from business”. The entire income having been offered by the assessee company itself, under the head “income from other sources”, only those expenses which are laid out or expended wholly or exclusively, for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsolidated order, for the sake of convenience. 2. First we take up the appeal of the assessee for the A.Y. 2006-07, which is directed against the order of the Ld. CIT(A)-18, Kolkata, dt. 18/11/2015. 3. The relevant facts of the case giving rise to this appeal are that the assessee is a company, which filed its return of income for A.Y. 2006-07 on 07/11/2006, declaring total loss of ₹ 1,04,61,604/-. In the said return, the income arising from various sources including interest, profit on sale of shares etc. was offered by the assessee under the head income from other sources and expenses aggregating to ₹ 1,20,03,739/- were claimed against the said income as deduction. During the course of assessment proceedings, the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. During the course of the appellate proceedings, I have also perused the balance sheet for three subsequent assessment years. It is seen that assessee has no business activity in the three subsequent assessment years as well. During the appellate proceedings the A.R. of the assessee also confirmed that in none of the subsequent years till date, assessee has carried out any business activity. Under the circumstances it is clear that assessee had stopped business activity prior to the commencement of the current assessment year. Hence A.O. is justified in disallowing the business expenses claimed by the assessee. 5. The Ld. CIT(A) also rejected the contention of the assessee that the expenses to the extent of ₹ 25,08,47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions, the Assessing Officer had been right in denying the claim of the appellant assessee towards allowances of various expenses which had to be necessarily incurred by the appellant company for its maintenance, except to the meagre extent of ₹ 50,000/-. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in rejecting the argument on behalf of the appellant assessee that since the A.O. had assessed FBT expenses at ₹ 25,08,477/-, his actions in still disallowing the entire expenses were arbitrary, unreasoned and improper. 4. On the facts and in the- circumstances of the case, the learned CIT(A) erred in upholding and confirming the assessment order passed u/s 143(3) dated 03.12.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opportunity to support and substantiate its case for deduction of the impugned expenses u/s 57 (iii). Ground No. 2 of the assessee s appeal for A.Y. 2006-07 is treated as partly allowed. 7. As regards the issue raised in Ground No. 3, I find merit in the stand of the Revenue that the expenses of ₹ 25,08,477/-, cannot be allowed as deduction merely on the basis that FBT has been paid by the assessee on the said expenses especially when there is no income earned by the assessee under the head income from business . The entire income having been offered by the assessee company itself, under the head income from other sources , only those expenses which are laid out or expended wholly or exclusively, for the purpose of making or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the co-ordinate bench of this Tribunal in REI Agro Ltd. Vs. DCIT Central Circle-XXVII (ITA No. 1331 1423/Kol/2011, order dt. 19/06/2013), I, restore this issued to the file of the Assessing Officer, for the limited purpose of re-computing the disallowance u/s 14A by applying Rule 8D by excluding the investment on which no exempt income was actually received by the assessee during the year under consideration. Ground No. 2 of the assessee s appeal for the A.Y. 2010-11 is thus partly allowed. 10. Grounds No. 1 4 raised in the appeal of the assessee in A.Y. 2010-11, are general in nature which do not call for any adjudication. 11. In the result, both the appeals of the assessee are treated as partly allowed. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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