Nahar Retail Trading Services Ltd., New Delhi V. ITO, New Delhi

ITA 2883/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7621 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 20-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: Business income; Business expenditure; Tax effect
• Section: 268A; 13; 11

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 3158/DEL/2016 [A.Y 2011-12] THE INCOME TAX OFFICER VS. NAHAR RETAIL TR ADING SERVICES PVT. LTD WARD 17(3) [PREVIUOLSY KNOWN AS NAHAR THEA TRES NEW DELHI PVT LTD] 402, ANSARI BHAWAN 16, K.G. MARG, CONNAUGHT PLACE NEW DELHI PAN: AAACN 0194 R ITA NO. 2883/DEL/2016 [A.Y 2011-12] NAHAR RETAIL TRADING SERVICES PVT. LTD VS. THE INCOME TAX OFFICER [PREVIUOLSY KNOWN AS NAHAR THEATRES WARD 17 (3) PVT LTD] 402, ANSARI BHAWAN NEW DELHI 16, K.G. MARG, CONNAUGHT PLACE NEW DELHI PAN: AAACN 0194 R (APPLICANT) ( RESPONDENT) ASSESSEE BY : SHRI VISHAL KA LRA, ADV SHRI S.S. TOMAR, ADV DEPARTMENT BY : SHRI S.N. MEENA, SR. DR DATE OF HEARING : 27.01.2020 DATE OF PRONOUNCEMENT : 29.01.2020 2 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- THE ABOVE TWO CAPTIONED CROSS APPEALS BY THE REVENU E AND ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) 20, NEW DELHI DATED 16.03.2016 PERTAINING TO ASSESSMENT YE AR 2011-12. SINCE BOTH THESE APPEALS WERE HEARD TOGETHER, THESE ARE B EING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AN D BREVITY. ITA NO. 3158/DEL/2016 [REVENUES APPEAL] 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E CIT(A) ERRED IN DELETING THE ADDITION OF RS. 55,86,303/- MADE BY TH E 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 REVENUES APPEAL, THE APPEAL HAS TO BE DISMISSED IN THE LIGHT OF THE CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. 3 4. THE LD. DR VEHEMENTLY STATED THAT THIS CIRCULAR IN NOT APPLICABLE TO THE EXISTING APPEALS AS IT IS PROSPECTIVE IN NAT URE. 5. IN OUR CONSIDERED OPINION, THE LANGUAGE OF THE C IRCULAR 17/2019 DATED 08.08.2019 CLEARLY SHOWS THAT IT HAS REFERRED TO THE EARLIER CIRCULAR 3/2018 AND ITS AMENDMENT DATED 20.08.2018 VIDE WHICH MONETARY LIMIT FOR FILING OF INCOME TAX APPEALS BY THE DEPARTMENT BEFORE THE ITAT, HON'BLE HIGH COURT, SLP/AND APPEAL S BEFORE THE HON'BLE SUPREME COURT HAVE BEEN SPECIFIED. IT WOUL D BE PERTINENT TO REFER TO THE CIRCULAR NO. 17/2019 WHICH READS AS UN DER: CIRCULAR NO. 17/2019 NEW DELHI. 8TH AUGUST 2019 SUBJECT: - FURTHER ENHANCEMENT OF MONETARY LIMITS F OR FILING OF APPEALS BY THE DEPARTMENT BEFORE INCOME T AX APPELLATE TRIBUNAL, HIGH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT - AMENDMENT TO CIRCULAR 3 OF 2018 - MEASURES FOR REDUCING LITIGATION.- REFERENCE IS INVITED TO THE CIRCULAR NO.3 OF2018 DA TED 11.07.2018 (THE CIRCULAR) OF CENTRAL BOARD OF DIREC T TAXES (THE BOARD) AND ITS AMENDMENT DATED 20TH AUGUST. 20 18 VIDE WHICH MONETARY LIMITS FOR FILING OF INCOME TAX APPE ALS BY THE 4 DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL. HI GH COURTS AND SLPS/APPEALS BEFORE SUPREME COURT HAVE B EEN SPECIFIED. REPRESENTATION HAS ALSO BEEN RECEIVED TH AT AN ANOMALY IN THE SAID CIRCULAR AT PARA 5 MAY BE REMOV ED. 2. AS A STEP TOWARDS FURTHER MANAGEMENT OF LITIGATI ON. IT HAS BEEN DECIDED BY THE BOARD THAT MONETARY LIMITS FOR FILING OF APPEALS IN INCOME-TAX CASES BE ENHANCED FURTHER THR OUGH AMENDMENT IN PARA 3 OF THE CIRCULAR MENTIONED ABOVE AND ACCORDINGLY, THE TABLE FOR MONETARY LIMITS SPECIFIE D IN PARA 3 OF THE CIRCULAR SHALL READ AS FOLLOWS: S.NO. APPEALS/SLPS IN IT MATTERS MONETARY LIMIT (RS.) 1. BEFORE APPELLATE TRIBUNAL 50,00,000/- 2. BEFORE HIGH COURT 1,00.00.000/- 3. BEFORE SUPREME COURT 2.00.00,000/- 3. FURTHER, WITH A VIEW TO PROVIDE PARITY IN FIL ING OF APPEALS IN SCENARIOS WHERE SEPARATE ORDER IS PASSED BY HIGHER APPELLATE AUTHORITIES FOR EACH ASSESSMENT YEAR VIS-A-VIS WHER E COMPOSITE ORDER FOR MORE THAN ONE ASSESSMENT YEARS IS PASSED. PARA 5 OF THE CIRCULAR IS SUBSTITUTED BY THE FOLLOWING PARA: '5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX E FFECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES IN THE CASE OF EVERY ASSESSEE. IF, IN THE 5 CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARISE IN M ORE 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 S PECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF A N ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECIFIED IN PARA 3. FURTHE R, EVEN IN THE CASE OF COMPOSITE ORDER OF ANY HIGH COURT OR AP PELLATE AUTHORITY WHICH INVOLVES MORE THAN ONE ASSESSMENT Y EAR 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 LIMI T SPECIFIED IN PARA 3. IN CASE WHERE A COMPOSITE ORDE R/ JUDGEMENT INVOLVES MORE THAN ONE ASSESSEE. EACH ASS ESSEE SHALL BE DEALT WITH SEPARATELY.' 4. THE SAID MODIFICATIONS SHALL COME INTO EFFECT FR OM THE DATE OF ISSUE OF THIS CIRCULAR. 5. THE SAME MAY BE BROUGHT TO THE NOTICE OF ALL CON CERNED. 6. THIS ISSUES UNDER SECTION 268A OF THE INCOME-TAX ACT, 1961. 7. HINDI VERSION WILL FOLLOW. 6 6. AS MENTIONED ELSEWHERE BY CIRCULAR 17/2019, THE CBDT HAS FURTHER ENHANCED THE MONETARY LIMIT FOR FILING OF A PPEALS AND THE SAME IS AMENDMENT TO CIRCULAR 3/2018. WE FIND THAT CLAU SE 13 OF CIRCULAR 3/2018 READS AS UNDER: THE CIRCULAR WILL APPLY TO SLPS/APPEALS/CROSS OBJEC TIONS /REFERENCES TO BE FILED HENCEFORTH IN HON'BLE SUPRE ME COURT/TRIBUNAL AND IT SHALL ALSO APPLY RETROSPECTIV ELY TO PENDING SLPS/APPEALS/CROSS OBJECTIONS/ REFERENCES. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN P ARA 3 ABOVE MAY BE WITHDRAWN/NOT PRESSED. 7. IN LIGHT OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT CIRCULAR NO. 17/2019 SHALL ALSO APPLY RETROSPECTIVE LY TO PENDING APPEALS. IN THAT VIEW OF THE MATTER, THE APPEAL FI LED BY THE REVENUE STANDS DISMISSED. 8. AS A RESULT, THE APPEAL OF THE REVENUE STANDS DI SMISSED. 7 ITA NO. 2283/DEL/2016 [ASSESSEES APPEAL] 9. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF BUSINESS EXPENSES OF RS. 16,16,065/- MADE BY THE ASSESSING OFFICER U/S 24(B) OF THE INCOME-TA X ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. 10. ON A PERUSAL OF THE COMPUTATION OF THE INCOME V IS A VIS ANNUAL ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER NOTI CED THAT THE ASSESSEE HAS RETURNED INCOME FROM RENT. THE ASSESS ING OFFICER FURTHER OBSERVED THAT THE ASSESSEE DID NOT CARRY OUT ANY BU SINESS ACTIVITY AND YET CLAIMED LOSS OF RS. 16,16,065/- UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE WAS ASKED TO SHOW CAUSE AS TO WHY EXPENDITURE MAY NOT BE DISALLOWED SINCE THERE IS NO BUSINESS ACTIVITY. 11. IN ITS REPLY, THE ASSESSEE EXPLAINED THAT IT IS ENGAGED IN RENTING IMMOVABLE PROPERTY AND FOR THE YEAR UNDER CONSIDERA TION, THE ASSESSEE COMPANY HAS INCURRED THE FOLLOWING EXPENSES: 1. PROFESSIONAL & LEGAL CHARGES - 15,49,885/- 2. GENERAL EXPENSES - 66,181/- TOTAL EXPENSES - 16,16,066/- 8 12. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF TH AT SINCE THE ASSESSEE HAS NOT BEEN ENGAGED IN ANY BUSINESS ACTIV ITY, THEREFORE, THERE IS NO JUSTIFICATION OF CLAIM OF ANY EXPENSE O N ACCOUNT OF BUSINESS EXPENSES. THE ASSESSING OFFICER FURTHER OBSERVED TH AT THE ASSESSEE HAS BEEN ALLOWED STATUTORY DEDUCTION UNDER THE HEAD IN COME FROM HOUSE PROPERTY AND, THEREFORE, EXPENSES CLAIMED TO THE T UNE OF RS. 16,16,065/- ARE NOT ALLOWABLE EXPENSES AND ACCORDIN GLY, 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 DRE W OUR ATTENTION TO THE COMPUTATION OF INCOME WHICH IS EXHIBITED AT PAG ES 24 OF THE PAPER BOOK AND POINTED OUT THAT THOUGH FOR THE ACCOUNTING PURPOSE RENTAL INCOME HAS BEEN SHOWN AS BUSINESS RECEIPTS, BUT WHI LE 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 EXPEND ITURE INCURRED WHICH INCLUDED PROFESSIONAL AND LEGAL CHARGES PAID TO THE CA FIRMS FOR IT MATTERS AND COMPANY LAW MATTERS AND FURTHER AUDIT F EES PAID TO 9 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 FI NDINGS OF THE ASSESSING OFFICER AND READ THE RELEVANT OBSERVATION S/FINDINGS OF THE LD. CIT(A). 7. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW AND WITH THE ASSISTANCE OF THE LD . COUNSEL FOR THE ASSESSEE, WE HAVE CONSIDERED THE RELEVANT DOCUMENTA RY EVIDENCE BROUGHT ON RECORD IN THE FORM OF PAPER BOOK. 8. THE BIFURCATION OF EXPENSES CLAIMED BY THE ASSES SEE AS EXHIBITED AT PAGE 40 OF THE PAPER BOOK IS AS UNDER: EXPENSE HEAD AMOUNT PROFESSIONAL & LEGAL CHARGES ** 1,549,885 GENERAL EXPENSES ## 66,181 TOTAL EXPENSES 1,616,066 10 PROF & LEGAL FEES - PARTY NAME DETAILS TOTAL (RS) ANEJA & CO. INCOME TAX 1 5,25,000 PARIKH & ASSOCIATES COMPANY LAW 13,236 PARIKH PAREKH & ASSOCIATES SUBRAMANIAN SRINIVASAN & ASSOCIATES GRAND TOTAL COMPANY LAW MATTERS 5,037 COMPANY LAW MATTERS 6,612 1 5,49,885 9. IN OUR CONSIDERED OPINION, A BODY CORPORATE HAS TO INCUR CERTAIN EXPENDITURE MANDATORY TO MAINTAIN ITS CORPORATE STR UCTURE. A PERUSAL OF THE EXPENSES MENTIONED HEREINABOVE CLEARLY SHOW THAT ALL THE EXPENSES HAVE BEEN INCURRED FOR MAINTAINING CORPORA TE STRUCTURE OF THE ASSESSEE. IN OUR CONSIDERED VIEW, SUCH EXPENDI TURE HAS TO BE ALLOWED WHILE COMPUTING THE INCOME OF THE ASSESSEE. OUR THIS VIEW IS FORTIFIED BY THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF MOKUL FINANCE PVT LTD 29 SOT 11. THE RELEVANT FINDINGS O F THE CO-ORDINATE BENCH READ AS UNDER: 3. THE MATERIAL FACTS OF THE CASE ARE LIKE THIS. T HE ASSESSEE IS A DOMESTIC COMPANY AND, IN THE RELEVANT PREVIOUS YE AR, IT HAD INCOME ONLY FROM INTEREST AND DIVIDEND. IN THE COUR SE OF 11 SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTICED THA T NO BUSINESS ACTIVITIES WERE CARRIED OUT BY THE ASSESSE E. HE THUS REQUIRED THE ASSESSEE TO SHOW CAUSE AS TO 'WHY NOT THE EXPENSES OF THE ASSESSEE BE DISALLOWED AS THERE WAS NO BUSINESS ACTIVITY DURING THE YEAR' AND 'THE INCOME EARNED BE BROUGHT TO TAX'. THE ASSESSEE SUBMITTED THAT THE EXPENSES INCU RRED BY THE ASSESSEE ARE ONLY ON ACCOUNT OF SALARIES AND CONVEY ANCE TO STAFF WHICH WAS REQUIRED TO RUN THE OFFICE, AND ON ACCOUN T OF PAYMENT OF PROPERTY TAX OF THE BUILDING FROM WHICH OFFICE I S RUN. IT WAS POINTED OUT THAT THERE WAS NO SALE AND PURCHASE OF SHARES IN THE RELEVANT PREVIOUS YEAR AS THE STOCK MARKET WAS UNST ABLE AND MARKET CONDITIONS WERE NOT STABLE. THERE IS NO DISP UTE ABOUT THE FACT THAT IN THE EARLIER YEARS, THE ASSESSEE WAS EN GAGED IN BUSINESS OF BUYING AND SELLING SHARES AND ITS INCOM E FROM THIS ACTIVITY WAS BROUGHT TO TAX UNDER THE HEAD 'BUSINES S INCOME'. THE AO REJECTED THE EXPLANATION OF THE ASSESSEE BY OBSERVING THAT AS ADMITTEDLY THERE WAS NO BUSINESS ACTIVITY D URING THE RELEVANT PREVIOUS YEAR, NO EXPENSES COULD BE ALLOWE D. THE LOSS CLAIMED BY THE ASSESSEE WAS DISALLOWED, AND THE BUS INESS 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 EX PENDITURE 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 AGGRIE VED OF THE RELIEF SO GIVEN BY THE CIT(A) AND IS IN APPEAL BEFO RE US. 12 4. SMT. IYER, LEARNED DEPARTMENTAL REPRESENTATIVE, SUBMITS THAT THE CIT(A) WAS INFLUENCED BY THE FACTORS WHICH WERE NOT RELEVANT TO DECIDE WHETHER OR NOT THE EXPENSES IN Q UESTION SHOULD BE ALLOWED AS DEDUCTION IN COMPUTATION OF BU SINESS INCOME. SHE SUBMITS THAT GENUINENESS OF EXPENDITURE , ON WHICH EMPHASIS IS PLACED BY THE CIT(A), IS WHOLLY IRRELEV ANT IN COMING TO THE CONCLUSION THAT THE EXPENDITURE IS TO BE ALL OWED EVEN AS THERE IS NO BUSINESS ACTIVITY DURING THE RELEVANT P REVIOUS YEAR. IT IS ALSO POINTED OUT THAT REASONABLENESS OF EXPEN DITURE ALSO HAS NO BEARING ON THIS ISSUE. IT IS FURTHER POINTED OUT THAT THE REASONING OF THE CIT(A) IS VAGUE AND LACKS SPECIFIC AND COGENT REASONS, GERMANE TO THE CONTEXT, FOR DELETING THE D ISALLOWANCE OF EXPENSES. LEARNED DEPARTMENTAL REPRESENTATIVE RE LIES UPON TRIBUNALS' ORDER IN THE CASE OF ADASOFT (INDIA) (P) LTD. V. DY. CTT (2006) 9 SOT 31 (DEL) IN SUPPORT OF THE DISALLOWAN CE OF EXPENDITURE WHEN BUSINESS IS NOT IN EXISTENCE. SHE RELIES UPON THE ORDER OF THE AO, JUSTIFIES THE SAME, AND URGES US TO RESTORE THE ORDER OF THE AO. DR. GUPTA, LEARNED COUNSEL FOR THE ASSESSEE, SUPPORTS AND JUSTIFIES THE ORDER OF THE C IT(A). DR. GUPTA SUBMITS THAT THE ASSESSEE IS A COMPANY AND TH E EXPENDITURE INCURRED BY THE ASSESSEE ARE MINIMAL EX PENDITURE JUST TO KEEP THE COMPANY AFLOAT. IT IS SUBMITTED TH AT THE ASSESSEE WAS NOT CARRYING OUT BUSINESS ACTIVITY DUE TO ADVERSE MARKET CONDITIONS, BUT THE ASSESSEE BEING AN ARTIFI CIAL JURIDICAL PERSON, HAS TO INCUR EXPENDITURE FOR MAINTAINING IT S EXISTENCE 13 AND FOR CARRYING OUT WHATEVER LITTLE ACTIVITIES THA T THE ASSESSEE IS INVOLVED IN. OUR ATTENTION IS INVITED TO HON'BLE CALCUTTA HIGH COURT'S JUDGMENT IN THE CASE OF CTT V. GANGA PROPER TIES LTD. (1993) 199 LTR 94 (CAL) WHEREIN IT IS HELD THAT EVE N WHEN COMPANY HAS ONLY EARNINGS INCOME FROM OTHER SOURCES , THE EXPENDITURE INCURRED BY THE COMPANY FOR ITS CONTINU ED EXISTENCE AND FOR RETAINING CLERICAL STAFF, SECRETARY AND ACC OUNTANT AND OTHER INCIDENTAL EXPENSES, ARE ALLOWABLE DEDUCTION. DR. GUPTA THEN TAKES US THROUGH THE JUDGMENT OF HON'BLE PUNJA B AND HARYANA HIGH COURT IN THE CASE OF NAKODAR BUS SERVI CE (P) LTD. V. CLT WHEREIN IT WAS HELD THAT EVEN WHEN THE ASSES SEE'S BUSINESS WAS DISCONTINUED, DEDUCTION IN RESPECT OF SALARIES PAID TO EMPLOYEES WAS ALLOWABLE DEDUCTION AGAINST INTERE ST INCOME. THE NEXT JUDICIAL PRECEDENT HE RELIES UPON IS A JUD GMENT 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 IT S STATUS AS COMPANY AND FOR ITS CONTINUED EXISTENCE AS SUCH, IS ALLOWABLE DEDUCTION, EVEN AFTER DISCONTINUATION OF BUSINESS I N 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 BE CAUSE NO BUSINESS ACTIVITY IS CARRIED ON IN THE RELEVANT PRE VIOUS YEAR, AND IN THE ABSENCE OF ANY CATEGORICAL FINDING TO THE EF FECT THAT BUSINESS HAS CLOSED FOR GOOD, THE AO CANNOT JUMP TO THE CONCLUSION THAT THE BUSINESS HAS CEASED. THE DISTIN CTION BETWEEN CLOSURE OF BUSINESS AND SUSPENSION OF BUSINESS ACTI VITY IS SOUGHT 14 TO BE HIGHLIGHTED AND THE RELEVANT JUDICIAL PRECEDE NTS CITED. IN REJOINDER, SMT. IYER ACCEPTS THAT THERE IS NO CATEG ORICAL FINDING ABOUT CLOSURE OF BUSINESS, BUT SHE ADDS THAT THE LA CK OF SUCH A FINDING CANNOT MEAN THAT EXPENSES ARE TO BE ALLOWED EVEN AS THERE IS NO BUSINESS IN EXISTENCE. SHE REITERATES H ER SUBMISSIONS AND URGES US TO RESTORE THE DISALLOWANCE MADE BY TH E AO. 10. CONSIDERING THE TOTALITY OF THE FACTS IN LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH [SUPRA] WE DIRECT THE ASSESSING O FFICER TO DELETE THE ADDITION OF RS. 16,16,065/-. 11. BEFORE PARTING, WE FIND THAT THE ASSESSING OFFI CER HAS RELIED UPON VARIOUS JUDICIAL DECISIONS. A CAREFUL PERUSAL OF T HOSE DECISIONS SHOW THAT ALL THE DECISIONS RELATE TO THE FACT THAT RENT AL INCOME HAS TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . IN THE CASE IN HAND, THE ASSESSEE HAS ITSELF ASSESSED RENTAL INCOM E UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THEREFORE, THE DECIS ION RELIED UPON BY THE ASSESSING OFFICER/DR WOULD DO NO GOOD TO THE RE VENUE. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS DI SMISSED. 15 12. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO. 3158/DEL/2016 IS DISMISSED AND THAT OF THE ASSESSEE IN ITA NO. 2883/DEL/2016 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29.01. 2020. SD/- SD/- [ KULDIP SINGH] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH JANUARY, 2020. VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 16 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER