9911796707
TMI Blog2021 (12) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the fixed assets of the assessee company were subject matter of litigation u/s 18 of Land Acquisition Act and assessee was due to receive compensation of 460 crores which would be the income of the assessee in the year to receive. Assessee was maintaining this establishment and corporate set up for which it had incurred certain expenditure. Tribunal allowed the expenditure stating when the possibility of the revival of the business activities or operation of the assessee are not ruled out once for all, it cannot be said that the assessee company had closed down its operations permanently so as to disallow the business expenditure. The temporary lull in the business during the lean period of transaction cannot be mistaken to be the perma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee :- "1. Action of Commissioner of Income Tax (A) in upholding the addition made by Deputy Commission of Income Tax on account of Disallowance of Administrative Expenses of ₹ 48,48,892/- to the returned income is unjust, illegal arbitrary and against the facts and circumstances of the case. 2. Action of Commissioner of Income Tax (A) in upholding the addition made by Deputy Commission of Income Tax on account of Depreciation of Fixed Assets of ₹ 7,93,830/- to the returned income is unjust, illegal arbitrary and against the facts and circumstances of the case. 3. Facts in brief are that the assessee company has filed its return of income on 31.03.2015 declaring loss of ₹ 63,24,110/-. AO noted that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified that there is a temporary lull. However, he held that only few expenses can be considered to be business expenditure in case of assessee that can be allowed and accordingly, he held that certain expenses, i.e. paying of statutory dues, legal & professional charges, audit fee and salary of some employees, and accordingly he held that part of the amount should be allowed. Accordingly, out of salary and wages expenditure claimed at ₹ 25,46,049/-, he confirmed the disallowance amounting to ₹ 23,46,049/- holding that ₹ 2,00,000/- is sufficient. Secondly, under the head legal professional charges amounting to ₹ 4,54,655/- and audit fee amounting to ₹ 1,12,360/-, he allowed in full. However, the balance exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain expenditure. Accordingly, the Tribunal allowed the expenditure after observing and holding as under :- "7. We have gone through the record in the light of the submissions on either side. As could be seen from the order of the learned CIT(A), the fixed assets of the assessee are the subject matter of litigation u/s 18 of the Land Acquisition Act and the assessee was due to receive a compensation amount of ₹ 460 crore with interest which would be the income of the assessee in the year that would be received. In this context, the maintenance of the establishment by the assessee has rightly accepted by the learned CIT(A) as an indication of the intention of the assessee to resume the business if the opportunity for it arises in futu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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