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TMI Blog2022 (10) TMI 977X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Hence the stoppage of production should be taken as 'temporary lull' in the business and hence there was no necessity in disallowing the entire expenses claimed by the assessee - See MICRO TURNERS (P) LTD. VERSUS JCIT, ROHTAK [ 2016 (5) TMI 284 - ITAT DELHI] Dispute may be put to rest by making disallowance of part of expenses claimed by the assessee. This is due to the fact that considerable time, i.e., more than nine years have elapsed from the date of closure of the financial year. This issue should be settled at this stage. Considering the fact that similar expenses have been allowed in the earlier years and since it was submitted that most of the expenses have been incurred through banking channels and the nature of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taining the disallowance of expenses made by the Assessing Officer. 4. The assessee is engaged in the business of manufacturing machineries and accessories used in pharmaceutical industry. The AO noticed that, during the year under consideration, the assessee did not carry on any business. Further, the AO noticed that the assessee has claimed following expenses aggregating to Rs. 23.68 lakhs in the Profit and Loss account. Sr. No. Particulars Amount (Rs.) 1 Direct expenses 883812 2 Employee benefit expenses 810390 3 Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee during the year, because of the intense labour troubles faced by the company due to strike, bandh and non-attendance by labourers. The learned AR submitted that this difficult situation has caused temporary lull in the activities of the assessee and hence there is no reason to disallow expenses incurred by the assessee in the normal course. 7. He further submitted that the director of the assessee has stated that most of these expenses have been incurred through banking channels by way of cheque payments and hence there was no element of bogus expenditure involved in these claims. The learned AR further submitted that the assessee could not furnish evidences in support of the claim due to problems faced by it due to str ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... we find that there is no dispute that whenever an assessee is able to establish that the expenses of rent staff and various other business expenses were incurred to keep its business alive they cannot be disallowed merely on the ground of temporary lull in business. Thus a temporary lull on account of the circumstances prevailing in the market cannot lead to the conclusion that the assessee has no intention to resume its business. The law on this issue is well-settled. Similarly the decisions in the context of the assessee company being an artificial judicial person which necessarily needs to incur expenditure to keep itself alive also are well-settled as the expenses incurred to keep the existence of the assessee company alive al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the earlier years have been allowed and this is the first year of stoppage of production. 11. Accordingly, in the facts and circumstances of the case, I am of the view that the dispute may be put to rest by making disallowance of part of expenses claimed by the assessee. This is due to the fact that considerable time, i.e., more than nine years have elapsed from the date of closure of the financial year. Hence, I am of the view that this issue should be settled at this stage. Considering the fact that similar expenses have been allowed in the earlier years and since it was submitted that most of the expenses have been incurred through banking channels and the nature of expenses would show that they are normal expenses incurred in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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