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TMI Blog2021 (8) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income Tax (Appeals) had rendered a finding that the transaction itself was a sham transaction, the Tribunal rightly noted that the Assessing Officer has not disputed or doubted the genuineness of the transaction. Tribunal noted that the income and expenditure from business was accepted by the Revenue authorities for the earlier years treating the business activity of dehydrated vegetables as a separate and discontinuation of the business of the assessee, is not a correct view taken by the authorities when the assessee has considered both the business activities as its business and offered the income and expenditure for the earlier years, which was accepted. No substantial question of law. - T.C.A. No.418 of 2009 - - - Dated:- 2- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccessories, auto components, etc. The return of income for the Assessment Year under consideration, AY 2003-04, was processed under Section 143(1) on 10.12.2003, and subsequently, the case was taken up for scrutiny and notice under Section 143(2) was issued on 13.10.2004. On such scrutiny assessment, the Assessing Officer pointed out that the assessee had deposited a sum of ₹ 6 Crores as security with M/s.Terra Agro Technologies Ltd. for leave and license operations to take over the operations of M/s.Terra Agro Technologies Ltd. for a period of 24 months with effect from January, 2001, with monthly lease rent of ₹ 50 Lakhs. The assessee was able to carry on the business only for six months, i.e., upto July, 2001 only, and suffer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies have not disputed the details regarding income and expenditure furnished by the assessee. But, the A.O. has concluded that since the security deposit is in the nature of capital, the same cannot be allowed as revenue expenditure or business loss. Even the A.O. has not disputed the genuineness of transaction between the parties through the said agreement. We further note that when the income and expenditure from the business was accepted by the revenue authorities for the earlier years, then treating the business activity of dehydrated vegetables as a separate and discontinuation the business of the assessee is not a correct view taken by the lower authorities when the assessee has considered both business activities as its business and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital asset of permanent nature by depositing such a security or for a capital asset having enduring benefit of permanent nature. Even the assessee has discontinued the operations before the expiry of the terms of the agreement and suffered loss in the shape of non-recovery of security deposit, the same would be a business loss of the assessee and allowable under Section 37 of the Act. It is an undisputed fact that as per the Memorandum of Association of the assessee-company, apart from other business, the business of preservation, dehydration, freeze-drying, etc. and dealing with export, import handle as a principal or as an agent of all kinds of agro products with further objects of the company vide amendment made by the assessee-company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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