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TMI Blog2015 (12) TMI 1840X X X X Extracts X X X X X X X X Extracts X X X X ..... he assets rented out either. The assessee is incurring is a business loss and thats all that matters. Whatever be the consequences of such losses on assessee s ultimate tax liability does not govern the question whether deduction for expenses could be allowed or not - disallowances sustained by the CIT(A) infact deserve to be deleted - Decided in favour of assessee. Unexplained credit - amount shown as deposit received from Pharmason Exports was added as unexplained credit by the Assessing Officer, for want of complete details and verifications - HELD THAT:- We are not inclined to uphold this addition. We have noted that the amount is received from the banking channel, it is duly referred to in the rent agreement itselfa copy of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ads from the colon, there was no activity during the relevant previous year. It was also noted that the office of the assessee is virtually closed and the factory premises is rented out. The Assessing Officer also noted that the assessee has shown rental income from the said factory, amounting to ₹ 13,66,732, as also income from other sources, being bank and FD interest, aggregating to ₹ 1,80,140. The Assessing Officer further noted that the assessee had claimed various expenses, such as electricity, commission, interest, telephone and vehicle expenses etc, amounting to ₹ 8,06,080. On these facts, the Assessing Officer noted that since there was no business income, in computation of business income, assessee has claimed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions in market, he temporarily suspended the arecanut business for the assessment year in question. Nevertheless, he was maintaining the establishment and was waiting for improved market conditions in arecanuts. It was thus an admitted position that no activities were carried out so far as this part of the business was concerned. On these facts, their Lordships took note of the position that There is nothing on record to show that he completely abandoned or closed the business forever. On the other hand, his books of account revealed that he was meeting the establishment charges and interest payments as detailed in the accounts in the year of accounts. It was then observed that the question whether the business is being carried on must de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g by any of the authorities below that there was a cessation of business. It is not the case, as has been stated by the AO, that the assessee is claiming deduction of business expenses from rental income. The expenses incurred by the assessee are business expenses and just because there is no business income during the relevant period, such deductions cannot be declined. The depreciation is not in respect of the assets rented out either. The assessee is incurring is a business loss and thats all that matters. Whatever be the consequences of such losses on assessee s ultimate tax liability does not govern the question whether deduction for expenses could be allowed or not. In the light of these discussions and bearing in mind entirety of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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