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TMI Blog2020 (4) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... L/2016, ITA No. 2883/DEL/2016 - - - Dated:- 29-1-2020 - Shri N.K. Billaiya, Accountant Member, And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Vishal Kalra, Adv, Shri S.S. Tomar, Adv For the Department : Shri S.N. Meena, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- The above two captioned cross appeals by the revenue and assessee are preferred against the order of the ld. CIT(A) 20, New Delhi dated 16.03.2016 pertaining to assessment year 2011-12. Since both these appeals were heard together, these are being disposed of by this common order for the sake of convenience and brevity. ITA No. 3158/DEL/2016 [Revenue s appeal] 2. The solitary grievance of the revenue is that the CIT(A) erred in deleting the addition of ₹ 55,86,303/- made by the Assessing Officer u/s 24(b) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short]. 3. As can be seen from the quantum involved in the Revenue s appeal, the appeal has to be dismissed in the light of the CBDT Circular No. 17/2019 dated 08.08.2019. 4. The ld. DR vehemently stated that this Circular in not applicable to the existing appeals as it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely for every assessment year in respect of the disputed issues in the case of every assessee. If, in the case of an assessee, the disputed issues arise in more than one assessment year, appeal can be filed in respect of such assessment year or years in which the tax effect in respect of the disputed issues exceeds the monetary limit specified in para 3. No appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. Further, even in the case of composite order of any High Court or appellate authority which involves more than one assessment year and common issues in more than one assessment year, no appeal shall be filed in respect of an assessment year or years in which the tax effect is less than the monetary limit specified in para 3. In case where a composite order/ judgement involves more than one assessee. each assessee shall be dealt with separately. 4. The said modifications shall come into effect from the date of issue of this Circular. 5. The same may be brought to the notice of all concerned. 6. This issues under section 268A of the Income-tax Act, 1961. 7. Hindi version ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under the head Income from house property and, therefore, expenses claimed to the tune of ₹ 16,16,065/- are not allowable expenses and accordingly, disallowed the same. 13. The assessee carried the matter before the ld. CIT(A) but without any success. 5. Before us, the ld. counsel for the assessee drew our attention to the computation of income which is exhibited at pages 24 of the paper book and pointed out that though for the accounting purpose rental income has been shown as business receipts, but while computing the taxable income for the year, rental income has been shown under the head Income from house property . The ld. counsel for the assessee further drew our attention to the details of expenditure incurred which included professional and legal charges paid to the CA firms for IT matters and Company Law matters and further audit fees paid to statutory bodies. It is the say of the ld. counsel for the assessee that such expenses are allowable expenses and should be allowed. 6. Per contra, the ld. DR strongly supported the findings of the Assessing Officer and read the relevant observations/findings of the ld. CIT(A). 7. We have given thoughtful co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was required to run the office, and on account of payment of property tax of the building from which office is run. It was pointed out that there was no sale and purchase of shares in the relevant previous year as the stock market was unstable and market conditions were not stable. There is no dispute about the fact that in the earlier years, the assessee was engaged in business of buying and selling shares and its income from this activity was brought to tax under the head Business income . The AO rejected the explanation of the assessee by observing that as admittedly there was no business activity during the relevant previous year, no expenses could be allowed. The loss claimed by the assessee was disallowed, and the business income was assessed at 'nil'. Aggrieved, assessee carried the matter in appeal before the CIT(A). The CIT(A) held that the AO has not doubted genuineness of the expenditure, that the expenditure was necessary for running the organisation, that it was neither extravagant nor excessive, and that, therefore, the AO was not justified in disallowing the same. The AO is aggrieved of the relief so given by the CIT(A) and is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent he relies upon is a judgment of Hon'ble Allahabad High Court in the case of CTT v. Rampur Timber and Turnery Co. Ltd. . In this case, it was held that the expenditure incurred by a company, for retaining its status as company and for its continued existence as such, is allowable deduction, even after discontinuation of business in certain circumstances. On the strength of these precedents, he justifies the conclusions arrived at by the CIT(A). His next tier of defence consists of the proposition that only because no business activity is carried on in the relevant previous year, and in the absence of any categorical finding to the effect that business has closed for good, the AO cannot jump to the conclusion that the business has ceased. The distinction between closure of business and suspension of business activity is sought to be highlighted and the relevant judicial precedents cited. In rejoinder, Smt. Iyer accepts that there is no categorical finding about closure of business, but she adds that the lack of such a finding cannot mean that expenses are to be allowed even as there is no business in existence. She reiterates her submissions and urges us to restore the disall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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