Shri Pawan K Katia, Bathinda V. The Income Tax Officer, Bathinda

ITA 315/ASR/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7339 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 27-03-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 12-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Section: 143(3); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 315/ASR/2014 A SSESSMENT YEAR: 2009-10 PAWAN K. KATIA PROP. M/S LAXMI OIL MILLS, AMRIK SINGH ROAD, BATHINDA [PAN: ACLPK 6018P] VS. INCOME TAX OFFICER, WARD 1(2), BATHINDA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P. N. ARORA (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 27.03.2019 DATE OF PRONOUNCEMENT: 30.04.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA ('CI T(A)' FOR SHORT) DATED 04.02.2014, PARTLY ALLOWING THE ASSESSEES APPEAL C ONTESTING HIS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREI NAFTER) DATED 09.02.2011 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE SOLE ISSUE ARISING IN THIS APPEAL IS THE MAI NTAINABILITY OF THE DISALLOWANCE OF EXPENDITURE IN A SUM OF RS.4,17,433 , STATED AS INCURRED FOR MAINTENANCE OF BUSINESS PREMISES. ITA NO. 315/ASR/2014 (AY 2009-10) PAWAN K. KATIA V. ITO 2 3. THE ASSESSEE RETURNED HIS INCOME FOR THE YEAR UN DER THE HEADS INCOME FROM HOUSE PROPERTY (FOR RENTAL INCOME) AND INCOME FRO M THE OTHER SOURCES (FOR INTEREST INCOME). HE, RUNNING A COLD STORAGE, SINCE DISCONTINUED, CLAIMS THAT THE SAID BUSINESS STANDS ONLY SUSPENDED, SO THAT ALL TH E EXPENDITURE INCURRED FOR THE UPKEEP OF THE BUSINESS PREMISES, AS WELL AS TO KEEP IT IN READINESS, SO AS TO ABLE TO START HIS BUSINESS AS WHEN THE RIGHT OPPORTUNITY ST RIKES, IS DEDUCTIBLE. THE SAME WAS DENIED AS IT IS THE ONLY THE INCOME OF THE BUSINESS CARRIED ON BY THE ASSESSEE DURING THE RELEVANT YEAR THAT IS ASSESSABLE U/S. 28 OF THE ACT. NO BUSINESS WAS ADMITTEDLY CARRIED OUT DURING THE RELEVANT YEAR FOR THE ASSESS EE TO CLAIM ANY EXPENDITURE. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE ASSESSEES CASE, AS DISCERNED, IS THAT THE COL D STORAGE BUSINESS HAS BEEN ONLY TEMPORARILY SUSPENDED. REGULAR EXPENDITURE ON SALARIES, TRAVELLING, ELECTRICITY, TELEPHONE, ETC., IS BEING INCURRED, TO KEEP THE BUS INESS IN READINESS, I.E., SO AS TO BE ABLE TO RESTART IT AS AND WHEN RIGHT OPPORTUNITY COMES. WHERE SO, THE CLAIM FOR EXPENDITURE SHOULD NOT ATTRACT ANY DISALLOWANCE. TH IS IS AS IT IS NOT NECESSARY THAT THE EXPENDITURE SHOULD RESULT IN A POSITIVE INCOME OR SOME RECEIPT. HOWEVER, APART FROM A BALD CLAIM, THERE IS NOTHING ON RECORD TO SU PPORT THE ASSESSEES CASE/VERSION. SINCE WHEN IS THE BUSINESS CLOSED OR SUSPENDED? SUR ELY, THEY WOULD BE STRONG AND PRESSING REASONS FOR THE SAME, WHICH ARE UNIT/ASSES SEE, AND NOT, INDUSTRY, SPECIFIC THERE BEING NOTHING TO INDICATE THE LATTER. WHAT AR E THOSE REASONS, WHICH ARE CONSPICUOUS BY THEIR ABSENCE? WHAT IS BEING DONE, M ORE PARTICULARLY, THE STEPS TAKEN DURING THE RELEVANT YEAR TO START THE BUSINES S, ADDRESSING THE SAID, UNSPECIFIED REASONS, CAUSING ITS CESSATION OR SUSPENSION IN TH E FIRST PLACE? WHAT IS MEANT BY RIGHT OPPORTUNITY? DID THE BUSINESS EVENTUALLY ST ART? IF SO, WHEN AND HOW? MERELY INCURRING EXPENDITURE, UNLESS SHOWN TO BE IN CURRED FOR REVIVING THE COLD ITA NO. 315/ASR/2014 (AY 2009-10) PAWAN K. KATIA V. ITO 3 STORAGE BUSINESS, COULD NOT COUNTENANCED. IN FACT, THERE IS NO EXPENDITURE ON REPAIRS, WHICH IS MENTIONED AS THE EXPENDITURE IS S TATED TO HAVE BEEN INCURRED FOR THE UPKEEP OF THE PREMISES. A DIRECT NEXUS OF THE E XPENDITURE BEING CLAIMED AND THE ASSESSEES BUSINESS, EVEN IF IT DOES NOT RESULT IN ANY RECEIPT WHICH IS IN LAW NOT RELEVANT, WOULD STAND TO BE ESTABLISHED FOR IT TO BE ALLOWED, I.E., WHERE SO SHOWN, AND WHICH IS NOT. WHY, EVEN IN A RUNNING BUS INESS, IT IS ONLY THE EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY FOR BUS INESS PURPOSES THAT IS DEDUCTIBLE SECTION 37(1). THE LOSS ON TRADING IN CH ANNA IS A DIFFERENT BUSINESS ALTOGETHER, EVEN AS FOUND BY THE FIRST APPELLATE AU THORITY. 5. I HAVE, FOR THE FOREGOING REASONS, NO HESITATION IN UPHOLDING THE IMPUGNED DISALLOWANCE. I DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COU RT ON APRIL 30, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 30.04.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: PAWAN K. KATIA PROP. M/S LAX MI OIL MILLS, AMRIK SINGH ROAD, BATHINDA (2) THE RESPONDENT: INCOME TAX OFFICER, WARD 1( 2), BATHINDA (3) THE CIT(APPEALS), BATHINDA (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER