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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 ..... hether the Ld. Commissioner of Income tax(Appeals) is right in holding receipts of Rs. 1,25,607/- of miscellaneous income and Rs. 75,150/- of insurance premium refund are assessable under the head "Business Receipts" in place of income from Other Sources without appreciating that there was no business activity in the relevant previous year and no sales were reported in returns of income for A.Y. 2013-14 and 2014-15. 2. On the facts and in the circumstances of the case and in law, whether the Ld. Commissioner of Income tax (Appeals) is right in deleting disallowances of expenses incurred on account of employee benefit expenses, depreciation and other expenses totaling to Rs. 71,62,567/- without appreciating the fact that there was no busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure which has been disallowed on the ground that the assessee did not carry out any business activity during the year and therefore, the same could not be allowed either u/s 37 or u/s 28. The same resulted into disallowance of following expenditure: - 3.1 Aggrieved, the assessee agitated the same with success before Ld. CIT(A) vide impugned order dated 01/02/2017 wherein the assessee submitted that adequate details of misc. income were duly filed before Ld. AO vide letter dated 15/10/2014 and therefore, the observations made by Ld. AO were incorrect. After appreciation of details, Ld. CIT(A) came to conclusion that misc. income of Rs. 1.25 Lacs was received by way of liquidation of old stock and the insurance premium refund was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lack of business per se. There has been no winding up of the appellant-company either. Its physical infrastructure used in the manufacturing activity and its human resource infrastructure too is intact. In these circumstances, there cannot be any case for disallowance of the business expenses as done by the Assessing Officer. In similar circumstances, the Delhi Bench of Hon'ble Tribunal had held the matter in favour of the assessee while rendering its decision in the case of Harsh International Pvt. Ltd. v. DCIT (ITA no. 2498/Del/2013, assessment year 2009-10 dated 14th 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 depr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no manufacturing of soaps and detergents during the relevant previous year and that there was consequently very little trading of the same. It would also be important to note that the Assessing Officer's disallowance of the impugned expenditure was not based on any other criteria but the there was lack of business activity and the consequential assessability of its profit. Accordingly, after respectfully following the a fore cited superior judicial authorities, the entire disallowance of expenditure of Rs. 71,62,567/- as made by the Assessing Officer is hereby set aside. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & 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 Ld. 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 authority. This being the case, no infirmity or perversity could be found in the impugned order. Accordingly, the revenue's appeal stands dismissed which makes assessee's cross-objections infructuous. 6. The appeal as well as cross-objection stand dismissed. Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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