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TMI Blog2019 (2) TMI 1818X X X X Extracts X X X X X X X X Extracts X X X X ..... its fixed assets were in existence and were not sold-off during impugned AY. The perusal of other expenses as placed on record reveal that the same are in the nature of electricity, water charges, rent, duties taxes, travelling, telephone expenses, legal expenses other routine expenditure. So far as the treatment of misc. income and insurance premium refund is concerned, the complete details of the same was already filed by the assessee before AO and the same were found to be arising out of liquidation of old stock and refund of excess premium paid by the assessee and therefore, the same were clearly business income in nature. The revenue is unable to rebut the factual matrix as well as case laws being relied upon by first appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re reported in returns of income for A.Y. 2013-14 and 2014-15. 3. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income tax(Appeals) erred in not appreciating the fact that the assessee failed to adduce any material before the Assessing Officer to reflect intention of carry on the business. The assessee has filed Cross Objection in support of the impugned order. 2.1 Fact in brief are that the assessee being resident corporate entity stated to be engaged in manufacturing of soaps and detergents was assessed in scrutiny assessment u/s 143(3) of the Income Tax Act, 1961 on 24/03/2015 by Ld. Deputy Commissioner of Income Tax, Circle- 7(3)(1), Mumbai [AO] wherein the income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the assessee and therefore, these items constituted business receipts. Head of Expenditure Amount (Rs.) Employee benefit expense 33,03,025 Depreciation 2,89,084 Other expenses 45,34,684 Total 71,62,567 3.2 The assessee also submitted that non-carrying of manufacturing activity could not vitiate claim of business expenditure since the assessee was in existence and had every intention to carry out the business. The first appellate authority, after due consideration of factual matrix concurred with assessee s stand in the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h February 2014). It had held that the intention to conduct the business activity was the paramount factor for examining the assessee s claim with regard to expenses of depreciation. As the infrastructure set up by the appellant had not been dismantled, it had to be presumed that it had every intention of carrying on its business. Even if the assessee was unable to carry out its business due to unavoidable circumstances beyond its control, it was entitled to allowance of its fixed and necessary expenses required to maintain its basic infrastructure, regardless of the fact that it had not been put to use during the year under consideration. A copy of this unreported decision has been placed on the appellate record. In the case of CIT v. Vell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side. Aggrieved the revenue is in further appeal before us. 4. The Ld. Departmental Representative [DR] submitted that the assessee did not carry out any business activity and therefore, the expenditure could not be allowed within the meaning of Section 37(1). Per Contra, Ld. Authorized Representative for Assessee [AR], Ms. Purvi Gandhi, submitted that although there was temporary lull in the business activities, however, the same could not be a ground to disallow genuine business expenditure. 5. We have carefully heard the rival submissions and perused relevant material on record. The undisputed position that emerges is that the assessee has not carried out any business activity during the impugned AY but claimed expenditure in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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